Fortinet Jumps 4% As Bullish Engulfing Pattern Signals Recovery Momentum

Fortinet (FTNT) advanced 3.95% during the latest session, closing at $102.97 within an intraday range of $99.25-$103.56, signaling a recovery attempt following recent volatility.
Candlestick Theory
The daily chart shows a decisive bullish engulfing pattern formed on July 14, 2025, as the strong green candle ($99.25-$103.56) fully consumed the previous red candle ($98.70-$100.62). This reversal signal near the $99 psychological support aligns with the $98.70-$99.25 immediate demand zone. Key resistance manifests at $103.56 (today's high and upper bound of July 10’s breakdown candle), followed by the $107.54 swing high from July 8, while the July 10 trough at $95.42 serves as a secondary support level should the recovery falter.
Moving Average Theory
Short-term moving averages remain constructive: the 50-day SMA ($101.20 approx) underlies the current price and slopes upward, reinforcing near-term bullishness. However, the 100-day SMA ($102.50) and 200-day SMA ($98.70) exhibit neutrality with sideways trajectories. The golden cross formed earlier (50-day above 200-day) provides structural support, but the absence of 100/200-day MA convergence suggests consolidation pressure persists above the $100 threshold.
MACD & KDJ Indicators
The MACD (-0.45 histogram) shows a nascent bullish crossover as the signal line converges toward the MACD line, hinting at dwindling downward momentum. Meanwhile, the KDJ oscillator (%K: 62, %D: 54, J: 68) recently emerged from oversold territory (<20 on July 11) after a bullish crossover, supporting the near-term recovery thesis. This co-movement suggests building upside potential, though both indicators remain neutral rather than strongly overbought.
Bollinger Bands
Bollinger Bands (20-day) expanded significantly during the July 10 breakdown ($99.91-$108.09), reflecting elevated volatility. Price currently trades near the upper band ($103.80 approx), indicating short-term strength. The breach of the middle band ($101.10) after three sessions below it reinforces bullish pressure, though the band width narrowing would be needed to confirm a sustainable directional move.
Volume-Price Relationship
Today’s advance occurred on above-average volume (6.02 million shares vs 30-day avg: 4.3 million), lending credibility to the bullish reversal. However, the July 8 peak at $107.54 featured higher volume (5.29 million), suggesting significant overhead supply. Volume divergence during the July 11-$99.06 pullback (lower volume than recent down days) indicated weak conviction, creating a fertile backdrop for today’s recovery. Sustained gains require volume expansion above July 8 levels.
Relative Strength Index (RSI)
The 14-day RSI (58.20) rebounded sharply from near-oversold conditions (30.80 on July 11). While exiting the neutral zone positively, it remains below the overbought threshold (70), allowing room for further upside. Caution is warranted as recent breakdowns occurred when RSI hovered near 60 (July 10), demonstrating this oscillator’s warning nature during transitional phases.
Fibonacci Retracement
Applying Fib levels to the recent correction (swing high: $108.69 on May 5; swing low: $95.42 on May 9) reveals critical thresholds. Today’s close ($102.97) places FTNT between the 50% ($102.06) and 38.2% ($103.62) retracements. A decisive break above $103.62 would open the path to 23.6% ($105.56), while failure to hold $102.06 may trigger tests of 61.8% support ($100.49). Confluence exists near $103.60 where Fib resistance overlaps with today’s high.
Confluence of the bullish engulfing candle, KDJ recovery, volume-backed breakout above the Bollinger mid-band, and RSI trajectory collectively signal upside bias toward the $103.62-$105.56 resistance zone. Key divergence emerges as MACD lags the price rebound and volume remains below prior peak levels, underscoring the need for confirmation. Failure to hold $102.06 Fib support would invalidate the recovery scenario, exposing the $99.25-$98.70 demand area.