Danaher Surges 3.87% on Bullish Engulfing Pattern as Moving Averages Confirm Uptrend

Danaher (DHR) closed the most recent session with a 3.87% rally to $211.8, reflecting strong momentum. The price action suggests a potential breakout from recent consolidation, with key support levels around $200–$205 and resistance at $212–$215.

Candlestick Theory

The recent 3.87% surge forms a bullish engulfing pattern, indicating a reversal from prior bearish pressure. Key support levels are identified at $197.46 (prior trough) and $192.81 (2025-06-23 low), while resistance clusters at $211.8 (current close) and $212.2 (2025-08-19 high). A break above $212.2 could target $215.39 (2025-03-24 high), but a failure to hold $205.72 (2025-08-12 close) may trigger a retest of $197.46.

Moving Average Theory

Short-term bullish bias is confirmed by the 50-day MA ($202.5) crossing above the 100-day MA ($199.1), with the 200-day MA ($203.3) acting as a dynamic support. The current price ($211.8) is 5.3% above the 200-day MA, suggesting a strong uptrend. However, the 50-day MA may face resistance at $205.48 (2025-07-25 high) if the rally stalls.

MACD & KDJ Indicators

The MACD histogram shows positive divergence, with the MACD line ($2.3) above the signal line ($1.1), indicating strengthening momentum. The KDJ oscillator (K: 82, D: 76) suggests overbought conditions, but the J line ($95) has not yet triggered a sell signal. A cross below the D line may precede a pullback, though the RSI (78) remains in overbought territory, implying caution.

Bollinger Bands

Volatility has expanded, with the upper band at $214.6 (vs. 2025-08-19 high of $213.06) and the lower band at $198.2. The price is currently near the upper band, signaling overbought conditions. A reversion to the 20-day MA ($209.1) or a test of the lower band ($198.2) could follow if the bands contract.

Volume-Price Relationship

Trading volume surged to 3.36 million shares on the 3.87% rally, validating the move. However, volume has been mixed in prior sessions, with a 1.53% gain on 4.85 million shares (2025-08-19) followed by a 0.91% drop on 2.86 million shares. Sustained volume above 3 million shares on upward moves supports trend continuation.

Relative Strength Index (RSI)

The RSI stands at 78, nearing overbought territory (70 threshold). While this suggests a potential correction, the RSI has historically remained elevated during DHR’s recent rally (e.g., 76 on 2025-08-14). A close below 60 may confirm weakening momentum, but a break above 80 could extend the uptrend.

Fibonacci Retracement

Key retracement levels from the 2024-10-17 low ($266.3) to the 2025-03-19 high ($240.97) include 61.8% at $205.4 and 78.6% at $197.4. The current price ($211.8) is above the 61.8% level, suggesting a potential test of $215.39 (100% target). A breakdown below $205.4 may trigger a retest of $197.4.

Backtest Hypothesis

A strategy selling DHR when RSI >70 and KDJ >80 (overbought conditions) would have generated signals on 2025-08-22 (RSI 78, KDJ 82). Historical data from 2025-07-30 (KDJ 85) and 2025-08-19 (RSI 76) show mixed outcomes: the 2025-07-30 sell signal would have captured a 3.87% gain by 2025-08-22, but the 2025-08-19 signal would have missed the subsequent rally. This highlights the strategy’s dependence on market context—overbought conditions during strong trends may delay corrections.