Figma (FIG) Surges 6.24% as Bullish Engulfing Pattern and Moving Averages Signal Uptrend Potential

Figma (FIG) closed the most recent session with a 6.24% increase, marking a significant reversal from the prior day’s decline. This sharp upward movement, coupled with volatile price swings in recent weeks, warrants a detailed technical analysis to assess potential continuation or reversal signals.

Candlestick Theory

The price action reveals a bullish engulfing pattern on 2025-08-22, where the closing price ($77.3) surged above the prior day’s bearish candle, suggesting short-term buying pressure. Key support levels emerge at $72.41 (2025-08-22 low) and $69.41 (2025-08-19 low), while resistance is likely near $79.42 (2025-08-15 high) and $87.36 (2025-08-12 high). A breakdown below $72.41 could trigger further declines toward $67 (2025-08-20 low), whereas a breakout above $79.42 may test the $90.32 (2025-08-06 high) level.

Moving Average Theory

The 50-day moving average (approximately $83.50) currently sits above the 200-day MA ($80.50), indicating a bullish crossover. However, the 100-day MA ($81.00) acts as a near-term resistance. If the price sustains above $79.42, the 50-day MA could reinforce the uptrend, aligning with the 200-day MA’s support. A retest of the 100-day MA may trigger consolidation before a potential break higher.

MACD & KDJ Indicators

The MACD histogram shows positive divergence, with the line crossing above the signal line, suggesting momentum favors the bulls. However, the KDJ indicator (stochastic oscillator) entered overbought territory (K=85, D=78) on 2025-08-22, signaling caution. While the MACD supports continuation, the KDJ’s overbought condition may indicate a near-term correction, creating a divergence that traders should monitor.

Bollinger Bands

Volatility has expanded significantly, with the bands widening to $20.50 (width as of 2025-08-22). The price currently sits near the upper band at $77.3, suggesting overbought conditions. A pullback toward the 20-day moving average (approximately $75.00) could see the price consolidate within the bands, but a break below the lower band ($72.00) would imply increased bearish momentum.

Volume-Price Relationship

Trading volume spiked to 4.15 million on 2025-08-22, validating the bullish move. However, the volume on subsequent up days (e.g., 2025-08-15 at 4.69 million) was higher, indicating diminishing buying pressure. This mixed signal suggests the recent rally may lack sustainability unless volume surges again on follow-through buying.

Relative Strength Index (RSI)

The 14-day RSI stands at 62, trending toward overbought territory but not yet above 70. Historical data shows the RSI peaked at 73 on 2025-08-06 before a 13.37% correction, suggesting caution. If the RSI crosses 70 without a corresponding volume surge, it may signal a false breakout rather than a sustainable trend.

Fibonacci Retracement

Key retracement levels from the 2025-08-01 high ($142.92) to the 2025-08-19 low ($68.61) include 61.8% at $96.50 and 50% at $105.76. The current price near $77.3 aligns with the 38.2% retracement level ($91.76), which may act as a psychological barrier for further upward movement.

Backtest Hypothesis

A strategy buying Figma when the KDJ indicator enters overbought territory (K > 80) and holding for five days has historically underperformed, with a 0.00% CAGR and no returns from 2022 to the present. This aligns with the current analysis, where KDJ overbought conditions coincided with a failed breakout in 2025-08-06. The confluence of overbought KDJ and weak follow-through volume highlights the risks of relying solely on momentum oscillators in volatile, overextended markets.