HIG Soars 3.88% on Four-Day Rally as Technical Indicators Signal Reversal Risks

The Hartford Insurance (HIG) has demonstrated a notable 3.88% increase in its most recent trading session, marking four consecutive days of gains with a cumulative 4.53% rise. This price action, coupled with elevated trading volumes and a retest of key resistance levels, warrants a multi-indicator analysis to assess the sustainability and potential reversal risks of the current trend.
Candlestick Theory

The recent four-day rally has formed a bullish continuation pattern, characterized by higher highs and higher lows, with the price closing near the upper end of the session range. Key support levels appear to be consolidating around the 130.415 (December 11 low) and 124.345 (November 4 low), while resistance is evident at 136.065 (December 11 high) and 137.13 (November 1 low). A breakdown below 130.415 could trigger a retest of the 124.345 level, whereas a sustained close above 136.065 may signal a new uptrend phase.
Moving Average Theory
Short-term momentum aligns with the 50-day moving average (approximately 127.5–128.5), which is currently below the 200-day MA (around 123.5–124.5), indicating a bearish crossover. However, the recent price surge has brought the 50-day MA closer to the 100-day MA (125.5–126.5), suggesting short-term buyers are gaining traction. A crossover above the 200-day MA would likely confirm a shift in medium-term sentiment.
MACD & KDJ Indicators
The MACD histogram has turned positive, with the line crossing above the signal line, reinforcing bullish momentum. Conversely, the KDJ stochastic oscillator is approaching overbought territory (%K near 80), which may caution against immediate continuation. Divergence between the MACD and price action (e.g., narrowing histogram despite rising highs) could foreshadow a pullback.
Bollinger Bands
Volatility has expanded, with the price nearing the upper Bollinger Band (136.5–137.5 range), a classic overbought signal. The bands’ width suggests heightened short-term volatility, which often precedes consolidation or reversal. A break below the middle band (133.5–134.5) would likely indicate weakening momentum.
Volume-Price Relationship
Trading volume has surged during the recent rally, particularly on the December 11 session (2.28 million shares), validating the strength of the uptrend. However, if volume tapers while prices remain elevated, it may signal waning buyer enthusiasm. Conversely, a spike in volume on a pullback could confirm renewed selling pressure.
Relative Strength Index (RSI)
The RSI has entered overbought territory (>70), aligning with the KDJ’s warning signals. While this does not immediately imply a reversal, it suggests the market is stretched, and a failure to maintain above 70 could lead to a corrective phase. A drop below 50 would likely confirm a trend reversal.
Fibonacci Retracement
Key Fibonacci levels derived from the December 11 high (136.065) and the November 4 low (124.345) include 131.5 (38.2% retracement) and 127.5 (61.8% retracement). A breakdown below 131.5 would likely trigger a test of the 127.5 level, while a rebound above 136.065 could target the 137.13 psychological barrier.
Confluence between overbought oscillators (RSI, KDJ) and a potential breakdown below the 130.415 support level may signal a high-probability correction. However, the strong volume during the rally suggests short-term buyers remain active. Divergences between MACD and price action should be closely monitored for early reversal cues.