JD's 1.44% Rally Sparks Bullish Reversal as Golden Cross and Key Resistance Levels Align

Candlestick Theory

JD’s recent price action shows a bullish reversal pattern, with a 1.44% gain on the most recent session, closing at $35.91. The candlestick body suggests strong buying pressure, as the close near the high of $36.08 indicates buyers dominating the session. Key support levels are identified at $35.11 (recent low) and $34.5 (prior trough), while resistance resides at $36.23 (2025-10-03 high) and $36.86 (2025-10-02 high). A break above $36.23 could signal a continuation of the upward trend, whereas a retest of $35.11 may trigger a bearish correction.

Moving Average Theory

Short-term bullish momentum is reinforced by the 50-day moving average (calculated from the 50-day closing prices, currently near $35.40) crossing above the 200-day MA (around $35.00). The 100-day MA ($35.15) aligns with the 50-day, forming a “golden convergence” that suggests a sustained uptrend. However, the 200-day MA acts as a dynamic support level, and a close below $35.00 could invalidate the bullish setup. The 50-day MA crossing above the 200-day MA (a “golden cross”) historically signals a trend reversal, but confluence with other indicators is needed to confirm its strength.

MACD & KDJ Indicators

The MACD histogram has shown a narrowing divergence, with the line (12-day EMA minus 26-day EMA) approaching the signal line, suggesting potential exhaustion of the current rally. A bullish crossover (MACD > signal line) on the 2025-10-06 session may indicate a short-term buying opportunity. The KDJ oscillator, however, shows the %K line (3-period stochastic) at 80 and %D at 75, signaling overbought conditions. This divergence between MACD and KDJ suggests caution, as momentum may stall despite the bullish MACD signal.

Bollinger Bands

Volatility has expanded recently, with the 20-day Bollinger Bands widening from $34.50 to $36.20. The price is currently near the upper band ($36.08), a classic overbought level. A pullback to the middle band ($35.45) could indicate a consolidation phase, while a break above the upper band may extend the rally. The bands’ expansion suggests increased market uncertainty, likely driven by earnings season or macroeconomic factors.

Volume-Price Relationship

Trading volume has surged to 11.86 million shares, a 30% increase from the prior session, validating the recent price strength. However, the volume profile shows a “volume peak” on 2025-10-03 ($35.4 close), where heavy selling pressure coincided with a bearish engulfing candle. This suggests institutional selling may be capping further upside. For the current rally to sustain, volume on bullish sessions should remain above 10 million shares, while declining volume during pullbacks would confirm distribution.

Relative Strength Index (RSI)

The 14-day RSI stands at 62, indicating neutral momentum but approaching overbought territory (70 threshold). A close above $36.23 could push RSI into overbought conditions, signaling a potential pullback. Conversely, a drop below 50 would confirm weakening momentum. Divergence between RSI and price action is minimal, but a bearish divergence on a 9-day RSI (current at 58) may emerge if prices rally without RSI confirmation.

Fibonacci Retracement

Key Fibonacci levels from the 2025-04-14 high ($47.08) to the 2025-02-24 low ($39.31) include 38.2% at $41.13 and 61.8% at $36.45. The current price of $35.91 is approaching the 61.8% retracement level, suggesting a potential support zone. A break below $36.45 would target the 78.6% level at $35.35, while a rebound above $36.45 could test the 50% level at $40.00.

Backtest Hypothesis

The proposed backtest strategy—buying JD on MACD Golden Cross signals and holding for 10 days—aligns with the current technical setup but faces mixed historical performance. From 2022 to 2025, 12 Golden Cross signals generated a 58.3% win rate and 2.1% average return per trade, yet total returns underperformed a simple buy-and-hold strategy (14.7% vs. 28.7%). This underperformance highlights the strategy’s limitations in trending markets, where holding long-term trends outperform short-term momentum. For example, the 2024-09-09 Golden Cross (47.2% gain) capitalized on seasonal demand, but other signals, like the 2023-05-05 entry, failed to sustain gains due to divergent RSI and KDJ readings. The strategy’s viability depends on confluence with Fibonacci levels and volume validation; trades entering near 61.8% retracements (e.g., $35.91) with rising volume may offer better risk-reward profiles.