Ingersoll Rand Surges 4.11% as Bullish Candlestick and MACD Signal Short-Term Momentum

Candlestick Theory

The recent 4.11% surge in Ingersoll Rand (IR) has formed a strong bullish candlestick with a large real body and minimal upper shadow, suggesting aggressive buying pressure. Key support levels include the 77.99 (recent low) and 74.98 (August 1st low), while resistance is marked by the 80.63 (recent high) and 84.63 (July 31st high). The price has been consolidating within a 75-80 range before this breakout, with the 81.42 high potentially acting as a new near-term resistance. A bearish divergence is evident in the July 30th to July 31st candles, where prices peaked at 86.7 but failed to surpass earlier highs, hinting at weakening momentum.

Moving Average Theory

The 50-day moving average (calculated as ~79.5) and 200-day MA (~83.0) suggest a bearish bias, with the shorter-term average below the longer-term. However, the 10-day MA has surged to ~80.0, crossing above the 50-day MA in a potential short-term bullish signal. The price currently sits above the 50-day MA but below the 200-day MA, indicating a mixed trend. A golden cross (50-day MA crossing above 200-day) would require a sustained rally to ~82.5, which remains a distant target. The 200-day MA acts as a critical psychological barrier; a break above it could shift the medium-term bias to bullish.

MACD & KDJ Indicators

The MACD histogram has turned positive, with the MACD line crossing above the signal line, signaling short-term bullish momentum. However, the KDJ stochastic oscillator shows the %K line at 85 and %D at 75, nearing overbought territory, which may indicate a potential pullback. A bearish divergence in the KDJ is visible between August 18th and August 21st, where prices fell while the %K line failed to confirm the weakness, suggesting mixed signals. The RSI stands at ~68, close to overbought levels, reinforcing caution about a near-term correction.

Bollinger Bands

Volatility has expanded recently, with the upper band at ~82.5 and lower band at ~77.5. The price closed at 80.63, near the upper band, indicating extended momentum. A contraction in band width during late July to early August suggests a period of consolidation before the recent breakout. If the price remains above the middle band (80.0), it supports continuation of the uptrend; a retest of the lower band could trigger a rebound.

Volume-Price Relationship

The recent 4.11% gain was accompanied by a 2.18 million-share volume, a 30% increase from the prior session, validating the move. However, volume has been inconsistent, with lower-than-average participation during the July-August consolidation phase. A surge in volume during a potential pullback could signal renewed buying interest, while declining volume during an uptrend might indicate exhaustion.

Relative Strength Index (RSI)

The RSI stands at ~68, nearing overbought levels, which may warn of a short-term reversal. A move above 70 would confirm overbought conditions, but this should be viewed as a caution rather than a sell signal. Historical data shows RSI failing to exceed 70 during the July 31st to August 1st rally, suggesting resistance at this level. A drop below 50 would signal weakening momentum, while a sustained close above 60 would maintain bullish bias.

Fibonacci Retracement

Key Fibonacci levels derived from the July 31st high (86.7) and August 1st low (74.98) include 38.2% at ~81.0, 50% at ~80.8, and 61.8% at ~80.5. The current price near 80.63 aligns with the 61.8% retracement level, suggesting potential support. A break below this level could target the 50% and 38.2% levels, while a move above 81.0 would validate the uptrend.

Backtest Hypothesis

The proposed strategy of buying on MACD Death Cross (bearish signal) and selling when MACD crosses above the signal line has shown limited efficacy from 2022 to 2025. While the equity curve grew from $100,000 to $7.2 million, this growth correlates with the broader market’s upward drift rather than the strategy’s precision. Frequent whipsaws during volatile periods, such as the July-August consolidation, highlight the strategy’s susceptibility to false signals. Integrating Fibonacci levels and volume analysis could refine entry/exit points, but the MACD alone remains insufficient for reliable execution in IR’s recent volatile environment.