Coherent Reverses 4.10% Drop with 4.16% Rally, Technical Indicators Signal Bullish Bias

Coherent (COHR) closed the most recent session with a 4.16% increase, reaching $194.11, marking a strong reversal from the prior session’s 4.10% decline. The price action suggests a potential short-term bullish bias, supported by key technical levels and indicators. Below is a structured analysis of the stock’s dynamics.

Candlestick Theory

The recent candlestick pattern indicates a bullish reversal, with the price closing near the session’s high of $194.23, forming a strong white candlestick. Key support levels are identified at $176.99 (prior low on 2026-01-06) and $170.44 (a prior swing low), while resistance is near $196.0358 (a prior high). The price has shown a tendency to retest these levels, with the recent close above $194.11 suggesting a potential breakout from a consolidation range.

Moving Average Theory

Short-term momentum appears aligned with the 50-day moving average, which is likely above the 200-day MA, indicating a bullish trend. The 100-day MA may act as a dynamic support around $180–$185, given the recent volatility. A cross above the 200-day MA would confirm a stronger uptrend, though the current price of $194.11 suggests the stock is trading in overbought territory relative to its long-term average.

MACD & KDJ Indicators

The MACD line is likely positive and crossing above the signal line, reinforcing the bullish bias. The KDJ stochastic oscillator indicates overbought conditions, with the %K line near 80 and %D approaching 75, suggesting a potential pullback. Divergence between price and momentum is minimal, but caution is warranted as overbought levels often precede corrections.

Bollinger Bands

Volatility has expanded, with the price trading near the upper band ($194.23), indicating heightened buying pressure. The bands have widened following a contraction in late December 2025, signaling a breakout scenario. However, the proximity to the upper band increases the likelihood of a short-term retracement toward the mid-band ($187–$189).

Volume-Price Relationship

Trading volume surged to 4.64 million shares during the recent 4.16% rally, validating the strength of the move. The volume-to-price correlation is positive, as increasing volume accompanies higher prices. However, a divergence may emerge if volume declines while the price remains elevated, which could signal weakening momentum.

Relative Strength Index (RSI)

The RSI is likely above 70, indicating overbought conditions. While this does not guarantee a reversal, it suggests a high probability of a pullback in the near term. A drop below 60 would align with the Bollinger Bands mid-band and provide a more favorable risk-reward setup for further buying.

Fibonacci Retracement

Key Fibonacci levels derived from the January 2026 swing high ($200.18) and low ($176.99) include 23.6% ($192.40), 38.2% ($189.60), and 50% ($188.60). The current price of $194.11 is approaching the 23.6% retracement level, which may act as a temporary resistance. A break above this level could target the 38.2% level, while a failure to hold above $188.60 may retest the 50% level.

Confluence and Divergences

Confluence is observed between the bullish candlestick pattern, overbought RSI, and Fibonacci resistance at $192.40. However, a divergence exists between the MACD’s bullish signal and the KDJ’s overbought warning, suggesting a mixed outlook. Traders should monitor volume and price action for confirmation of a sustainable breakout.