Coherent Surges 6.66% on Bullish Technical Signals as Two-Day Rally Hits 10.35%

Coherent (COHR) has surged 6.66% in the most recent session, extending a two-day rally with a cumulative gain of 10.35%. This sharp reversal from recent volatility suggests short-term momentum may be building, but deeper analysis is required to assess sustainability and potential reversals.
Candlestick Theory
The recent price action forms a bullish engulfing pattern, with the 2025-11-28 session’s candle (closing at $164.26) engulfing the preceding bearish candle. Key support levels are identified at $147 (2025-11-26 low) and $135.61 (2025-11-20 low), while resistance aligns with the 2025-11-28 high of $166.81. A break above $166.81 could trigger a test of the psychological $170 level, whereas a pullback to $147 may validate its role as a dynamic support.
Moving Average Theory
The 50-day MA (approximately $140–$145) and 200-day MA (around $95–$100) suggest a long-term bullish trend, with the price comfortably above both. However, the 100-day MA (~$130–$135) lags behind, indicating potential for a temporary consolidation phase. A cross above the 50-day MA would strengthen the case for a sustained uptrend, while a close below the 100-day MA could signal short-term profit-taking.

MACD & KDJ Indicators
The MACD histogram shows positive divergence, with momentum expanding as the price rises, suggesting continued bullish pressure. The KDJ oscillator (K at ~85, D at ~75) indicates overbought territory, though the D line remains ascending, implying momentum has not yet peaked. A bearish crossover in the KDJ or MACD could precede a correction, but the current alignment supports a continuation of the rally.
Bollinger Bands
Volatility has expanded, with the 20-period Bollinger Bands widening from a prior contraction in late October. The price sits near the upper band at $166.81, a classic sign of overbought conditions. A retest of the middle band ($155–$157) may occur, but a sustained close above the upper band could extend the move.
Volume-Price Relationship
Trading volume spiked on the recent rally (4.78 million shares on 2025-11-28), confirming the price surge. However, volume declined slightly on the second up day (3.66 million), which may hint at waning participation. If volume fails to expand further, it could signal a potential exhaustion of the rally.

Relative Strength Index (RSI)
The 14-day RSI stands near 70, indicating overbought conditions. While this is a common precursor to corrections, the RSI has not yet formed a bearish divergence against the price. A close below 60 would reduce immediate overbought concerns, but a drop below 50 would suggest a shift in momentum.
Fibonacci Retracement
Key retracement levels from the October–November downtrend to the recent rally include 23.6% ($150), 38.2% ($143), and 61.8% ($130). A pullback to the 38.2% level ($143) could attract buyers, while a breakdown below $130 would invalidate the current bullish narrative.
Confluence and Divergences
Multiple indicators align for a short-term bullish bias: bullish candlestick patterns, expanding Bollinger Bands, and positive MACD. However, the RSI and KDJ suggest overbought conditions, and the volume pattern raises caution. A divergence between the RSI and price action (e.g., lower highs in RSI despite higher price) would increase the probability of a near-term correction.
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