Cloudflare Surges 6.23% as Technical Indicators Point to Bullish Reversal

Cloudflare (NET) surged 6.23% in the most recent session, closing at $173.21, marking a significant reversal from prior bearish momentum. The candlestick pattern suggests strong buying pressure, with the price forming a bullish engulfing pattern on the daily chart. Key support levels are identified at $162.01 and $166.88, while resistance clusters near $173.66 and $175.78. The confluence of these levels with recent volume spikes indicates a potential continuation of the upward trend, though a breakdown below $162.01 could signal renewed bearishness.

Moving Average Theory

The 50-day, 100-day, and 200-day moving averages suggest a bullish bias, with the 50-day MA (approximately $170) currently above the 200-day MA (around $165), forming a golden cross. The price remains above the 200-day MA, reinforcing a long-term uptrend. However, the 100-day MA ($168) may act as a dynamic support zone. Divergence between the 50-day and 100-day MAs could indicate short-term volatility, but the overall alignment supports sustained momentum.

MACD & KDJ Indicators

The MACD histogram has expanded into positive territory, with the MACD line crossing above the signal line, confirming bullish momentum. The KDJ indicator (stochastic oscillator) shows overbought conditions (K at ~85, D at ~80), suggesting a potential pullback. However, the absence of bearish divergence between price and momentum metrics (e.g., higher highs in price with lower highs in K/D) implies the uptrend may persist. A bearish crossover in the MACD or a K/D drop below 50 could signal a reversal.

Bollinger Bands

Volatility has spiked, with the price near the upper Bollinger Band ($173.66), reflecting heightened short-term volatility. The bands have widened following a period of contraction in late January, indicating a breakout. A retest of the lower band ($163.05) could confirm a mean reversion, but the current position near the upper band suggests continued bullish bias. A break above the upper band may indicate extended overbought conditions.

Volume-Price Relationship

Trading volume surged to $914.2 million on the most recent session, validating the price increase. The volume profile shows a surge in buying pressure coinciding with the 6.23% rally, suggesting strong conviction. However, declining volume during subsequent consolidation phases (e.g., the 2.30% decline on 2026-02-05) may indicate weakening momentum. A divergence between volume and price action during pullbacks could signal distribution or exhaustion.

Relative Strength Index (RSI)

The 14-day RSI is likely above 70, indicating overbought conditions. While this does not necessarily signal an immediate reversal, a failure to break above prior resistance or a bearish divergence (e.g., lower highs in RSI with higher highs in price) would raise caution. The RSI’s alignment with the MACD and KDJ indicators suggests the rally may continue, but traders should monitor for a retest of the 50-level as a potential support/resumption trigger.

Fibonacci Retracement

Key Fibonacci levels derived from the January 27 peak ($218.22) and February 3 trough ($163.91) include 61.8% at $173.21 (coinciding with the recent close) and 50% at $191.06. The price’s consolidation near the 61.8% retracement level suggests a potential pivot point. A break above 50% would validate a deeper bullish trend, while a breakdown below 38.2% ($163.91) could trigger a retest of the January lows.