Eversource Surges 4.88% on Bullish Reversal Key Support at 63.30–63.50 Holds Amid 67.00 Resistance Target

Eversource (ES) has surged 4.88% over the past two trading sessions, marking a 5.85% rally from the prior close. This sharp rebound follows a prior 3.21% decline, suggesting a potential short-term reversal. The recent price action forms a bullish engulfing pattern, with the closing price surpassing the prior session’s high, indicating strong buying pressure. Key support levels appear to be forming around the $63.30–$63.50 range, where the stock found buyers after multiple pullbacks in late August and early September. Resistance is likely near $67.00, the recent high, and $69.47, the all-time peak in this dataset.

Candlestick Theory

The 2-day rally forms a strong bullish engulfing pattern, reinforced by a closing price above the prior session’s high. This suggests short-term momentum is intact. However, the price has yet to break through the $67.00 level, which acted as a resistance in late August. A sustained move above this level could target the $69.47 psychological barrier. Conversely, a retest of the $63.30 support (a prior trough) may trigger further buying or consolidation.

Moving Average Theory

The 50-day moving average currently sits at approximately $64.00, while the 200-day MA is near $61.50. The price has recently crossed above both, suggesting a bullish bias in the intermediate term. The 50-day MA crossing above the 200-day MA in late August confirmed a golden cross, reinforcing the long-term uptrend. However, the 100-day MA at $63.50 is closely aligned with the recent support zone, indicating a confluence of technical levels that may act as a magnet for price.

MACD & KDJ Indicators

The MACD line has crossed above the signal line, with a positive histogram suggesting strengthening momentum. The stochastic oscillator (KDJ) shows the K line at 78.0 and the D line at 65.0, indicating overbought conditions. While this may signal a short-term pullback, the divergence between the K line and price (which has risen while the K line peaked) suggests caution. The MACD’s bullish signal aligns with the RSI, but the KDJ’s overbought warning hints at potential exhaustion.

Bollinger Bands

The current price of $67.00 is near the upper Bollinger Band, reflecting high volatility. The bands have widened significantly in the past week, indicating increased market uncertainty. A break above the upper band may confirm a continuation of the uptrend, while a retest of the lower band near $62.00 could trigger a mean reversion. The recent contraction in band width during the August consolidation phase preceded this breakout, validating the current volatility surge.

Volume-Price Relationship

Trading volume has spiked to 13.6 million shares on the 4.88% rally, a 60% increase from the prior session. This volume surge confirms the strength of the recent move. However, the volume has not yet surpassed the levels seen during the May–June rally (20–30 million shares/day), suggesting the current buying interest, while robust, is not yet at peak levels. A sustained increase in volume above 20 million shares may be required to validate a breakout above $67.00.

Relative Strength Index (RSI)

The 14-day RSI stands at 68.5, approaching overbought territory (70). This aligns with the KDJ’s overbought signal but contrasts with the MACD’s positive momentum. While the RSI’s proximity to 70 suggests a potential pullback, it has historically failed to close above 70 during this rally, indicating a cautious overbought condition. A close above 70 could trigger profit-taking, but a sustained move below 50 would signal a shift in momentum.

Fibonacci Retracement

Key Fibonacci levels from the recent low of $62.00 to the high of $69.47 include 61.8% ($66.10) and 50% ($65.74). The current price of $67.00 is above the 61.8% level, suggesting the next target could be the $69.47 all-time high. A breakdown below $65.74 would invalidate the short-term bullish case and point to a retest of the 38.2% level ($64.30).

Backtest Hypothesis

The backtest of Eversource’s RSI overbought condition (70 threshold) from 2022 to the present reveals a nuanced performance profile. While the 3-day and 10-day win rates (67.65% and 70.59%) suggest a higher probability of short-term gains, the 30-day win rate of 55.88% indicates declining effectiveness over time. This aligns with the current RSI near 68.5, where a 1–3 day trade might capitalize on the overbought condition before a potential pullback. The maximum return of 1.64% on day 7 underscores the strategy’s suitability for short-term trading rather than holding. Integrating this with the recent bullish engulfing pattern and strong volume, a tactical entry near the $65.74 Fibonacci level, with a target at $67.00 and a stop below $63.30, could balance risk and reward.