CIBC's 3-Day Rally Pushes Shares 4.3% Higher, Sparking Bullish Technical Signals Amid Key Resistance and Support Levels

Candlestick Theory
The recent three-day rally in Canadian Imperial Bank of Commerce (CIBC) has formed a strong bullish pattern, with the price surging from $86.84 to $90.58. The most recent candlestick closed near its high, forming a long upper shadow on the prior session, suggesting buying pressure has overpowered short-term sellers. Key support levels are evident at $85.20 (December 1) and $84.06 (December 4), while resistance is at $90.78 (December 4 high). A potential bearish reversal signal could emerge if the price fails to hold above the 50% Fibonacci retracement level of $87.89, which aligns with the 100-day moving average.
Moving Average Theory
The 50-day moving average (approximately $86.20) and 200-day moving average ($71.50) are both bullish, with the 50-day line acting as dynamic support. The price is currently trading $4.38 above the 50-day MA, indicating short-term strength. The 200-day MA remains a critical baseline for long-term trend confirmation. A crossover above the 100-day MA ($85.90) would strengthen the case for a sustained rally, while a breakdown below $84.06 could trigger a test of the 200-day MA.

MACD & KDJ Indicators
The MACD histogram is expanding in positive territory, with the MACD line (12-day EMA minus 26-day EMA) at $3.20 and the signal line at $2.10, suggesting accelerating bullish momentum. The KDJ oscillator (Stochastic) shows overbought conditions, with the K-line at 82 and the D-line at 76, signaling a potential near-term pullback. A divergence between the KDJ and price action—such as lower highs in the oscillator while the price makes higher highs—could foreshadow a reversal.
Bollinger Bands
Bollinger Bands have widened significantly, reflecting heightened volatility. The price closed at $90.58, near the upper band ($90.80), indicating a potential overextension in the short-term rally. A retest of the lower band ($84.80) may occur if volatility contracts, but sustained trading above the middle band ($87.70) would validate the bullish trend.
Volume-Price Relationship
Trading volume surged on the most recent upsession, with 2.22 million shares traded, a 200% increase from the prior day. This confirms strong conviction in the rally. However, if volume declines on subsequent upmoves while the price remains elevated, it may signal weakening momentum. Divergence between volume and price could precede a correction, particularly if the price fails to surpass $90.78 on diminishing volume.
Relative Strength Index (RSI)
The 14-day RSI is at 68, approaching overbought territory (threshold at 70). This suggests the stock may be due for a consolidation phase or a pullback. A close below 60 would indicate weakening momentum, while a move above 70 could extend the rally but likely serve as a warning of short-term exhaustion.
Fibonacci Retracement
Key Fibonacci levels derived from the recent high ($90.78) and low ($64.07) include $80.25 (61.8%), $84.30 (50%), and $87.89 (38.2%). The price is currently testing the $87.89 level, which acts as a critical pivot. A break above this could target the $90.78 high, while a failure to hold it may lead to a retest of the $84.30 level.
Confluence and Divergences
The strongest confluence exists between the 50-day MA ($86.20) and Fibonacci 50% level ($84.30), which could act as a consolidation zone. However, the overbought RSI and KDJ suggest caution, as momentum indicators often precede price corrections. A divergence between the MACD and price (e.g., MACD declining while the price remains above the 50-day MA) would indicate a mixed signal, suggesting a potential sideways consolidation rather than a sharp reversal.

The current price action suggests a high-probability scenario of short-term consolidation after the three-day surge, with key support at $84.30 and resistance at $90.78. While the overall trend remains bullish, traders should monitor for a breakdown below $84.06 or a failure to hold the 50-day MA, both of which could signal a shift in sentiment.