EQT's Bearish Harami and RSI Divergence Signal Potential Reversal Amid Golden Cross and Key Fibonacci Levels

Candlestick Theory

EQT's recent price action reveals key structural levels and potential reversal signals. A bearish harami pattern formed on October 7, 2025, with a small bullish body engulfed by the prior session's range, suggesting short-term exhaustion. Key support levels are identified at $56.31 (a 10-day low) and $54.03 (a prior consolidation zone), while resistance clusters at $57.545 (a 12-day high) and $59.19 (a swing high from July 18). The 2025-10-03 bullish engulfing pattern (up 0.48%) and the 2025-09-24 bullish reversal (4.18% gain) indicate recurring support at $53.08–$54.03.

Moving Average Theory

Short-term momentum favors the bulls, as the 50-day MA ($54.50) crosses above the 100-day MA ($53.85), forming a golden cross. However, the 200-day MA ($52.30) remains a critical psychological barrier. The 2025-10-01–2025-10-03 rally pushed the 50-day MA closer to the 100-day MA, suggesting a potential continuation of the uptrend. Divergence between the 50-day and 200-day MAs (currently +$2.20) indicates intermediate-term strength, but a break below $54.00 could trigger a retest of the 200-day MA as a dynamic support.

MACD & KDJ Indicators

The MACD histogram turned negative on October 7, 2025, signaling waning bullish momentum, though the zero-line crossover remains intact. The stochastic oscillator (KDJ) shows oversold conditions at 28 on October 3, aligning with the 2025-10-03 bullish breakout. However, the RSI (discussed below) and KDJ readings have diverged since mid-October, with price making higher lows while KDJ forms lower highs—a bearish divergence suggesting potential reversal.

Bollinger Bands

Volatility has compressed in recent sessions, with the 20-day Bollinger Band width narrowing to 0.9% (October 5–7). This contraction may precede a breakout, as prices hover near the upper band ($57.545) on October 6–7. The 2025-10-01–2025-10-03 rally to the upper band coincided with above-average volume (12.1M shares), suggesting institutional participation. A break above $57.545 could trigger a 3–4% extension to $59.19, while a retest of the lower band ($54.03) would validate the consolidation zone.

Volume-Price Relationship

Volume patterns confirm the October 3–5 bullish reversal but contradict the recent October 6–7 pullback. The 2025-10-03 surge (11.9M shares) and 2025-09-24 rally (11.9M shares) occurred on robust volume, whereas the October 6–7 decline (7.9M–8.4M shares) lacked conviction. This "volume divergence" suggests the bearish move may lack sustainability, especially as prices remain above the 50-day MA.

Relative Strength Index (RSI)

The 14-day RSI (134.5) reached 30 on October 3, confirming oversold conditions and triggering the breakout. However, the RSI has since rebounded to 52, failing to exceed 60—a bearish signal for sustained momentum. The 2025-09-23–2025-09-24 RSI bottom at 29.5 and subsequent 4.18% rally align with classical oversold reversal patterns. Caution is warranted, as the RSI's inability to surpass 60 suggests a potential retest of $54.03.

Fibonacci Retracement

Key Fibonacci levels from the 2025-06-18 low ($48.93) to the 2025-07-18 high ($59.19) include 38.2% ($55.43), 50% ($54.06), and 61.8% ($52.69). The current price ($57.16) sits above the 38.2% retracement level, indicating a potential continuation of the uptrend. A break below $54.06 could target the 61.8% level at $52.69, which aligns with the 200-day MA.

Backtest Hypothesis

A backtest of the RSI-based strategy (buying EQT when RSI falls below 30 and holding for 5 days) from 2022–2025 yields mixed results. While the strategy captured the 2025-09-24 4.18% rally and the October 3–5 breakout, it underperformed the benchmark (S&P 500 energy sector) by 27% over the same period. This discrepancy suggests structural weaknesses in RSI-driven timing for EQT, possibly due to its merger activity and sector volatility. Integrating Fibonacci retracement levels and Bollinger Band breakouts could refine the strategy, as the October 3–5 move coincided with both a 38.2% retracement and a Bollinger Band expansion.