Expedia's 5.48% Surge Fuels Bullish Candlestick Momentum, Eyes $203–$205 Resistance

Candlestick Theory

Expedia’s recent price action on 2025-08-12 features a strong bullish candlestick with a 5.48% gain, closing near the session high of $203.19. This suggests aggressive buying pressure, potentially signaling a short-term reversal from prior consolidation. Key support levels are evident at $192–$195 (noted as a recurring floor in early August) and $180–$185 (a prior multi-week trading range). Resistance appears at $203–$205 (current peak) and $213 (a July 8 high). A potential "bullish engulfing" pattern is forming as the recent candle absorbs earlier bearish shadows, indicating a possible continuation of upward momentum if the $203 level holds.

Moving Average Theory

The 50-day moving average (~$185–$190) and 200-day MA (~$170–$175) show a clear bullish trend, with the 50-day line above the 200-day, suggesting medium-term strength. The 100-day MA (~$180–$185) aligns with the 50-day, reinforcing the uptrend. However, the recent surge to $203.19 has pushed the price well above all three moving averages, creating a potential overextension. A pullback to the 50-day MA could act as a critical filter for trend sustainability.

MACD & KDJ Indicators

The MACD histogram shows a recent golden cross, with the line rising above the signal line, suggesting momentum in favor of bulls. However, the KDJ (stochastic oscillator) indicates overbought conditions, with the %K line at 80+ and %D approaching 75, raising caution about near-term exhaustion. While the MACD suggests continuation, the KDJ divergence hints at a possible short-term correction. This mixed signal underscores the need for caution, as overbought levels often precede pullbacks unless reinforced by strong volume.

Bollinger Bands

Volatility has expanded recently, with the 20-day Bollinger Bands widening to $180–$210. The current price of $203.19 sits near the upper band, indicating a potential overbought condition. If the bands contract soon, it may signal a period of consolidation before a breakout. A close below the middle band (~$195) would suggest weakening momentum, while a sustained break above the upper band could confirm a new high.

Volume-Price Relationship

Trading volume on the recent up day (2.43 million shares) is notably higher than the 20-day average (~1.5–2.0 million), validating the price surge. However, the volume spike is concentrated in a single session; sustained follow-through would require consistent volume on subsequent bullish days. A decline in volume during pullbacks could indicate waning conviction, while increasing volume on downward moves may signal distribution.

Relative Strength Index (RSI)

The RSI has surged into overbought territory (>70), reflecting aggressive buying. While this often precedes corrections, Expedia’s recent rally has been driven by strong fundamentals and sector momentum, which could prolong the overbought phase. A drop below 60 may indicate a healthy retracement, but a failure to re-enter overbought levels after a pullback would suggest a shift in trend.

Fibonacci Retracement

Key Fibonacci levels from the July 8 high ($213) to the May 9 low ($156) include 61.8% at ~$182 and 38.2% at ~$197. The current price of $203.19 is above the 38.2% level, suggesting a potential test of the 61.8% retracement as support. A breakdown below $197 could trigger a retest of $182, aligning with prior support zones.

Backtest Hypothesis

The backtest strategy of buying on MACD golden crosses and holding for 20 days yielded a 19.5% gain but underperformed the market, likely due to the 20-day holding period capping gains during a sharp post-entry rally. This suggests that the strategy’s fixed horizon misses optimal exits during accelerated moves. A refinement could involve combining MACD signals with RSI overbought thresholds or tightening the holding period to 7–10 days to capture shorter-term momentum. Additionally, incorporating a trailing stop-loss at 5–7% could mitigate risks during potential reversals, aligning with the observed volatility patterns in Bollinger Bands and KDJ indicators.