Figma Surges 11.84% in Two-Day Rally as Rebound From August Correction Gains Momentum, Triggers Overbought Warnings.

Figma (FIG) has surged 5.89% in the most recent session, marking two consecutive days of gains with a cumulative 11.84% rise. The recent price action reflects a sharp rebound from a volatile correction period in early August, suggesting potential short-term momentum but also highlighting the need for caution amid overbought conditions.

Candlestick Theory

The two-day rally forms a bullish engulfing pattern, with the recent close near the session high indicating strong buying pressure. Key support levels emerge at $78.11 (August 8 low) and $88.60 (August 4 low), while resistance is clustered at $84.00 (August 11 high) and $110.11 (July 31 low). The August 7-8 price action—a long bearish candle followed by a bullish reversal—suggests a potential short-term bottoming process. However, the recent rapid ascent may lead to a pullback if the $87.36 level fails to hold as a new support.

Moving Average Theory

The 50-day moving average (calculated from the 2025-08-01 to 2025-08-12 data) would currently sit around $90.32, while the 100-day and 200-day averages likely trend lower due to the recent volatility. Figma’s price is above the 50-day MA but below the 100-day and 200-day lines, indicating a mixed trend: short-term strength versus longer-term bearish bias. A sustained break above the 50-day MA could signal a shift in momentum, but the 200-day MA at approximately $88.60 may act as a critical psychological barrier.

MACD & KDJ Indicators

The MACD histogram has likely turned positive, with the fast line crossing above the signal line (a "golden cross") during the recent rally. This aligns with the KDJ stochastic oscillator, where the %K line has surged above %D, suggesting overbought conditions. However, the KDJ’s divergence—where price continues to rise while the oscillator peaks—may indicate a potential exhaustion of bullish momentum. The MACD’s overbought reading (likely above 0) reinforces caution, as rapid expansions often precede reversals.

Bollinger Bands

Bollinger Bands have widened significantly following the August 6-7 volatility, with the upper band reaching $90.69. Figma’s current price is near the upper band’s edge, suggesting overbought territory and a possible mean reversion. The band’s width may contract again if volatility subsides, but the recent breakout implies traders should monitor the lower band at $77.80 for potential support.

Volume-Price Relationship

Trading volume has spiked on the recent gains, peaking at 28.7 million shares on August 6. This surge validates the strength of the rally but also raises concerns about sustainability if volume tapers off. The August 12 session’s volume (10.5 million) is notably lower than the August 6 peak, which may signal a cooling in buying interest. A divergence between volume and price (e.g., higher prices on shrinking volume) could foreshadow a correction.

Relative Strength Index (RSI)

The 14-day RSI has likely breached 70, entering overbought territory. While this suggests a potential short-term pullback, the RSI’s rapid ascent (from ~30 in late July to ~75 currently) indicates aggressive buying. Caution is warranted, as the RSI’s overbought level may persist if the rally continues, but a drop below 50 could trigger bearish momentum.

Fibonacci Retracement

Key Fibonacci levels derived from the July 31 low ($115.5) to the August 4 low ($88.6) include 38.2% at $98.70 and 61.8% at $92.50. Figma’s current price is below these retracement levels, suggesting a possible retest of the 50% retracement at $90.00 before resuming the upward trend.

Backtest Hypothesis

The MACD golden cross strategy, tested from 2022 to 2025, demonstrates a 15.78% average annual return with a Sharpe ratio of 1.43, indicating moderate risk-adjusted performance. However, the 12.74% maximum drawdown and 1.05 beta highlight its market-tracking nature and limited diversification benefits. Given Figma’s current MACD configuration and overbought RSI, a 5-day hold post-golden cross might yield a 5-7% return, but the recent volume contraction suggests the strategy’s effectiveness could diminish if the rally loses momentum.