GFS Surges 4.74% on Bullish Engulfing Pattern and Emerging Golden Cross as Support Levels Hold

Globalfoundries (GFS) closed the most recent session with a 4.74% increase, reaching $42.91, suggesting immediate bullish momentum. This sharp rise follows a recent consolidation phase, with price action forming a potential bullish engulfing pattern on February 6, 2026, where the candle’s body fully absorbs the prior bearish session. Key support levels appear at $40.97 (February 5) and $40.69 (February 3), while resistance is clustered near $43.06 (February 6) and $44.26 (January 30). A break above $43.06 could target the psychological $45 level, historically tested on January 29 and 28.

Candlestick Theory

The recent price action exhibits a strong bullish reversal pattern, with the February 6 session forming a long-bodied candle that pierced through a descending channel. The $40.97 support level has held twice in the past week, indicating a potential pivot point. However, a failure to retest this level could lead to a breakdown toward $39.18, as seen on February 3. The 50% Fibonacci retracement level at $41.47 (from the January 27 high of $47.41 to the December 31 low of $34.88) aligns with a prior trough on January 13, suggesting a confluence zone for further consolidation.

Moving Average Theory

The 50-day moving average (approximately $41.80) currently sits below the 200-day MA ($40.50), indicating a medium-term bullish crossover (golden cross) is emerging. The 100-day MA ($41.20) acts as a dynamic support, with price hovering above it for the past 10 sessions. A sustained close above the 200-day MA would confirm a shift in trend from bearish to bullish, while the 50-day MA crossing above the 200-day MA would reinforce this narrative.

MACD & KDJ Indicators

The MACD histogram has turned positive, with the MACD line (12,26) crossing above the signal line (9,26), signaling short-term bullish momentum. However, the KDJ stochastic oscillator shows the %K line at 85 and %D at 78, indicating overbought conditions. This divergence suggests caution, as the RSI (discussed below) may signal a potential pullback if the 70 threshold is breached. A bearish crossover in the KDJ oscillator would likely precede a correction toward the $40.97 support.

Bollinger Bands

Volatility has expanded recently, with the bands widening from a narrow range in early February. The price currently sits near the upper band at $43.06, suggesting a possible mean reversion. If the 20-day Bollinger Band midpoint (around $42.00) holds, it could act as a support for further consolidation. A breakdown below the lower band ($40.13) would signal a shift in volatility and potential bearish continuation.

Volume-Price Relationship

Trading volume on the February 6 rally (3.35 million shares) surged 20% above the 30-day average, validating the bullish breakout. However, volume has declined in the subsequent session (3.95 million shares), which may indicate waning buying pressure. A follow-through increase in volume on a retest of $40.97 would strengthen the case for a sustainable uptrend, while shrinking volume could hint at a false breakout.

Relative Strength Index (RSI)

The 14-period RSI stands at 68, approaching overbought territory (70 threshold). Given the recent 4.74% rally, a short-term pullback to the 50–55 range is probable, aligning with the 61.8% Fibonacci retracement level at $42.43. Traders should monitor a potential bearish divergence if the RSI fails to make higher highs despite rising prices, which could signal exhaustion in the current rally.

Fibonacci Retracement

Key Fibonacci levels from the January 27 high ($47.41) to the December 31 low ($34.88) include 23.6% at $44.15, 38.2% at $43.07, and 50% at $41.47. The price’s current position near $43.06 aligns with the 38.2% retracement, a critical area for potential consolidation. A break below $41.47 would target the 61.8% level at $40.29, which coincides with the 200-day MA.

Confluence points include the 38.2% Fibonacci level ($43.07) coinciding with the upper Bollinger Band and the 50-day MA acting as support. Divergences are evident between the MACD’s bullish signal and the KDJ’s overbought warning, suggesting a high-probability pullback. The volume surge on the recent rally adds credibility to the bullish case, but traders should remain cautious if the RSI fails to confirm further gains. A sustained close above $43.06 would validate the uptrend, while a breakdown below $40.97 would trigger a reevaluation of the medium-term bias.