Lumentum Surges 4.75% to $386.11 on Surging Volume as Bullish Reversal Gains Momentum Near Key Resistance

Lumentum Holdings (LITE) closed the most recent session up 4.75%, reaching $386.11. This move occurred on elevated volume, suggesting strong conviction in the rally. The price action reflects a potential bullish reversal, with the candlestick forming a large body near key resistance levels identified in the historical data.
Candlestick Theory
The recent bullish candlestick, closing near the upper end of the day’s range, suggests strong buying pressure. Key support levels are identified at $367.12 (2025-12-31 low) and $334.69 (2025-12-15 low), while resistance is at $387.105 (2025-12-29 high). The price has tested the upper resistance multiple times, with the most recent close indicating a potential breakout. A sustained close above $387.105 may confirm a bullish trend, whereas a pullback to $367.12 could test the strength of the support.
Moving Average Theory

Short-term moving averages (50-day, 100-day) have been trending above the 200-day MA, indicating an uptrend. The 50-day MA is currently near $370, while the 200-day MA is around $345, suggesting the stock is in a bullish phase. However, the 200-day MA may act as a dynamic support if the price retraces. A crossover of the 50-day MA above the 200-day MA would reinforce the bullish case, while a drop below the 200-day MA could signal a bearish turn.
MACD & KDJ Indicators
The MACD line has recently crossed above the signal line, forming a bullish crossover, which may indicate an uptrend continuation. The KDJ (stochastic oscillator) shows the stock entering overbought territory (K > 80), suggesting a potential pullback. However, the divergence between the MACD and KDJ—rising price with declining momentum—warrants caution. A bearish KDJ divergence could precede a correction, even if the MACD remains bullish.
Bollinger Bands
Bollinger Bands have expanded following the recent volatility, with the price near the upper band. This suggests overbought conditions and a possible mean reversion. The 20-day volatility (band width) has widened to 15%, indicating heightened uncertainty. A break above the upper band may signal strong momentum, but a retest of the lower band ($334.69) could validate the channel’s integrity.
Volume-Price Relationship
The most recent session’s volume ($1.07B) was significantly higher than the 30-day average ($550M), reinforcing the validity of the rally. Sustained volume above $500M on up days suggests strong institutional participation. However, declining volume on follow-through rallies could indicate waning momentum, highlighting the need for volume confirmation in subsequent sessions.
Relative Strength Index (RSI)
The 14-day RSI is approaching 70, indicating overbought conditions. While this does not guarantee an immediate reversal, it signals a potential pause in the uptrend. A close below 50 would suggest weakening momentum, whereas a sustained RSI above 60 would imply continued bullish bias.
Fibonacci Retracement
Key Fibonacci levels from the recent high ($400.89 on 2025-12-26) to the low ($309.07 on 2025-12-16) include 61.8% at $356.50 and 38.2% at $367.12. The current price near $386.11 aligns with the 23.6% retracement level ($387.10), suggesting a possible consolidation phase. A break above $387.10 may target the 38.2% level, while a drop below $367.12 could test the 50% level ($355.00).