CRH Cement Surges 4.29% as MACD Golden Cross and Key Support Levels Fuel Bullish Momentum

CRH cement (CRH) surged 4.29% in the most recent session, closing at ¥112.03. This sharp upward movement follows a volatile week marked by alternating bullish and bearish candlestick formations. The price action suggests a potential short-term reversal from prior bearish momentum, with key support levels emerging around ¥106.92 and ¥97.6, and resistance zones forming near ¥107.88 and ¥112.19.

Candlestick Theory

The recent price action features a strong white candle closing near the high of the session, indicating aggressive buying pressure. A prior doji on August 11, sandwiched between a long bearish candle and a bullish engulfing pattern, suggests a critical pivot point. Key support levels at ¥106.92 (August 7 close) and ¥97.6 (August 6 low) align with historical consolidation zones, while resistance is clustered near ¥112.19 (August 12 high). The formation of a bullish "harami" on August 4—where a small bearish candle is contained within the prior session’s range—hints at potential continuation of the uptrend if buyers hold above ¥107.88.

Moving Average Theory

The 50-day moving average (currently around ¥102.00) sits above both the 100-day (¥99.00) and 200-day (¥95.00) lines, confirming a medium-term bullish bias. The 200-day line, a critical long-term trend marker, has been acting as a dynamic support since mid-August, with the price rebounding from it on August 6. The 50-day MA’s steep upward trajectory suggests momentum is accelerating, though the 100-day MA’s slower ascent indicates a potential pullback could occur if the 50-day line crosses below it—a scenario not currently evident in the data.

MACD & KDJ Indicators

The MACD histogram has expanded positively over the past three sessions, with the fast line crossing above the signal line on August 12—a golden cross that historically signals short-term bullish momentum. The KDJ stochastic oscillator, however, shows the %K line peaking near 80 while %D lags behind, suggesting overbought conditions and a possible near-term correction. Divergence between MACD strength and KDJ overbought readings implies caution, as momentum may be exhausted before the 5-day backtest strategy’s holding period concludes.

Bollinger Bands

Volatility has spiked, with the bands expanding from a narrow range on August 5 to a width of ¥14.31 by August 12. The price’s recent close near the upper band (¥112.19) suggests a potential overextension, increasing the likelihood of a reversion toward the 20-day moving average (¥107.00). If the bands contract again, it may precede a breakout or breakdown, but current positioning favors a continuation of the upward trend until the upper band is decisively breached.

Volume-Price Relationship

Trading volume surged to ¥838 million on August 12, the highest in the dataset, validating the recent price increase. However, the volume-to-price ratio (¥112.03/¥838 million ≈ 0.133) is below the 20-day average (0.155), indicating the rally may be losing conviction. A follow-through increase in volume on the next upward leg would strengthen the case for a sustained move above ¥112.19, while declining volume could signal a distribution phase.

Relative Strength Index (RSI)

The 14-day RSI stands at 68, approaching overbought territory. While this suggests a potential pullback, historical data shows the RSI has frequently oscillated between 60 and 70 without triggering a bearish reversal. The indicator’s failure to exceed 70 in recent weeks implies the uptrend may remain intact unless the RSI collapses below 50—a threshold last seen on August 6.

Fibonacci Retracement

A key Fibonacci level at 61.8% (¥107.00) aligns with the 20-day moving average and acts as a critical support zone. The 38.2% retracement level (¥109.00) has been tested twice in the past week without breaking, suggesting buyers are accumulating in this range. A break below ¥107.00 would target the 50% level at ¥104.50, a psychological floor that has historically contained the stock during corrections.

Backtest Hypothesis

The backtest strategy of entering long positions on a MACD golden cross and holding for five days demonstrated a Sharpe ratio of 1.22, indicating acceptable risk-adjusted returns. However, the average daily return of 0.56% and maximum drawdown of 12.78% suggest the strategy’s primary value lies in risk mitigation rather than aggressive growth. Given CRH’s current MACD golden cross and RSI proximity to overbought levels, the strategy would trigger a long entry. The 5-day holding period aligns with the RSI’s potential to retest 60, offering a probabilistic target of ¥115.00 before encountering resistance from the upper Bollinger Band.