CoreWeave (CRWV) Surges 5.01% on Bullish Candlestick Patterns, Extends Two-Day Rally to 6.94% as 96.17 Resistance Looms

CoreWeave (CRWV) has rallied 5.01% in the most recent session, extending its two-day winning streak with a cumulative gain of 6.94%. The stock’s price action over the past two weeks has been marked by volatility, including a sharp 9.41% drop on August 29 followed by a rapid rebound. This pattern suggests a potential consolidation phase after a period of aggressive price swings.

Candlestick Theory

Recent candlestick formations indicate a bullish bias. The two-day rally has formed a "twin candle" pattern, with strong upper shadows and closing near highs, signaling institutional buying pressure. Key support levels are evident around $84.40 (September 5 low) and $87.48 (September 4 close), while resistance is clustered near $96.17 (September 8 high). A breakdown below the 84.40 level could trigger further bearish momentum, while a sustained close above 96.17 may confirm a short-term bullish trend.

Moving Average Theory

Short-term momentum aligns with the 50-day moving average (approx. $97.50), which remains above the 200-day MA ($103.08), suggesting a bearish medium-term trend despite recent gains. The 100-day MA ($99.50) acts as a critical psychological barrier. Price is currently trading below all major moving averages, indicating a potential continuation of a downtrend unless the 50-day MA crosses above the 200-day MA—a rare but impactful bullish signal.

MACD & KDJ Indicators

The MACD histogram has shown positive divergence in recent sessions, with the MACD line crossing above the signal line on September 5, hinting at a potential short-term reversal. The KDJ stochastic oscillator, however, is in overbought territory (K=87, D=82), suggesting caution. While the MACD’s bullish crossover supports a near-term rally, the KDJ’s overbought condition raises the risk of a pullback. A bearish crossover in the KDJ below the 80 level could validate a correction.

Bollinger Bands

Volatility has expanded recently, with price testing the upper Bollinger Band on September 8. The bands’ width has widened from a narrow contraction in late August, signaling a breakout phase. However, the current position near the upper band (at 96.17) suggests overbought conditions, increasing the likelihood of a retrace to the mid-band ($93.55–$90.44 range).

Volume-Price Relationship

Volume has surged during the recent rally, peaking at 24.7 million shares on September 8. This aligns with the price’s 5.01% gain, validating the move’s strength. However, declining volume on subsequent up days could signal weakening momentum. The September 2 session saw a massive 33.4 million shares traded amid a 9.41% drop, indicating heightened bearish sentiment during the prior correction.

Relative Strength Index (RSI)

The RSI has spiked to 70, entering overbought territory. While this typically signals a potential pullback, the RSI’s prolonged overbought phase in August suggests a strong uptrend may persist. A drop below 60 would likely indicate a bearish shift, but traders should watch for divergences between RSI and price action to confirm reversals.

Fibonacci Retracement

Key Fibonacci levels from the August 29 low ($90.70) to the September 8 high ($96.17) include 38.2% at $93.55 and 50% at $93.93. The current price near $93.55 aligns with the 38.2% retracement level, offering a potential support zone. A break below this level could target the 61.8% retracement at $92.38, reinforcing a bearish bias.

Backtest Hypothesis

A hypothetical backtest could combine RSI overbought conditions (RSI >70) with a bearish divergence in the KDJ oscillator (K < D) and a breakdown below the 50-day MA. Historical data shows that such a confluence occurred on August 29, preceding a 9.41% drop. If applied to the September 8 rally, this strategy would trigger a sell signal as RSI peaks and the KDJ diverges. However, the recent volume surge suggests caution—false signals may arise if institutional buyers reinforce the trend. A refined approach could include a trailing stop-loss at the 38.2% Fibonacci level to manage risk during volatile phases.