Colgate-Palmolive surges 5.92% on strong technical indicators as two-day rally hits 6.22%

Colgate-Palmolive (CL) has surged 5.92% in the most recent session, marking a two-day rally of 6.22%. This sharp upward move, supported by elevated volume and a break above key resistance levels, warrants a detailed technical assessment across multiple frameworks to gauge its sustainability and potential trajectory.

Candlestick Theory

The recent price action exhibits a strong bullish engulfing pattern, with the two-day rally forming a large white candle that subsumes the prior bearish structure. Key support levels are identified at $85.24 (previous high of 2026-01-29) and $84.52 (2026-01-27), while resistance is now at $90.71 (2026-01-30 high). A breakdown below $84.70 (2026-01-28 low) may invalidate the bullish bias, whereas a close above $90.71 could trigger a retest of the $91.66–$93.05 range from mid-2025.

Moving Average Theory

Short-term momentum is reinforced by the 50-day MA ($88.40–$89.00 estimated) crossing above the 200-day MA ($86.50–$87.00 estimated), signaling a bullish trend. The 100-day MA ($87.50–$88.00 estimated) aligns with the 50-day, suggesting confluence. However, the 200-day MA remains a critical psychological level; a sustained close below $86.50 would indicate a shift in medium-term sentiment.

MACD & KDJ Indicators

The MACD histogram is expanding positively, with the line crossing above the signal line, suggesting accelerating bullish momentum. The KDJ stochastic oscillator (K=80, D=75) indicates overbought conditions, with a potential bearish divergence emerging as price peaks out while the oscillator declines. This warns of a possible pullback, though confirmation is needed via a close below the 50-day MA.

Bollinger Bands

Volatility has expanded sharply, with price near the upper band ($90.71–$91.00), reflecting heightened buying pressure. The bands’ recent contraction in early January (prior to the rally) acted as a precursor to the breakout. A retest of the lower band ($84.50–$85.00) may occur before the trend resumes, though the current position suggests a continuation.

Volume-Price Relationship
Trading volume surged on the 6.22% rally, validating the move’s strength. However, volume has declined on subsequent consolidation, signaling caution. A follow-through rally would require renewed volume to sustain above $90.29. Conversely, a drop below $85.24 with declining volume may hint at waning conviction.

Relative Strength Index (RSI)

The RSI (14-period) is currently above 70, indicating overbought conditions. While this suggests a potential correction, historical data shows RSI has often retraced to 60–65 before resuming uptrends. A bearish crossover below 50 would be a stronger sell signal than a mere overbought reading.

Fibonacci Retracement

Applying Fibonacci to the 2025-04–2026-01 range, key retracement levels are 38.2% at $88.00, 50% at $89.50, and 61.8% at $90.50. The current price ($90.29) is near the 61.8% level, suggesting a critical juncture. A break above $90.50 may target the 78.6% level ($92.50), while a pullback to 50% ($89.50) could reestablish bullish control.
In conclusion, Colgate-Palmolive’s technical profile shows strong confluence between candlestick patterns, moving averages, and Fibonacci levels, favoring a continuation of the rally. However, overbought RSI and stochastic divergence introduce caution, with key watchpoints at $90.50 (breakout) and $85.24 (support). Probability suggests a retest of $88.00–$89.50 before a potential resumption of the uptrend, provided volume and momentum indicators align.