Monolithic Power Surges 7.46% in Three-Day Rally as Technicals Signal Strong Bullish Momentum

Monolithic Power (MPWR) concluded the most recent trading session at $731.84, marking a 3.62% gain. This extends a three-day rally, resulting in a cumulative increase of 7.46%, indicating strong short-term bullish momentum.
Candlestick Theory
Recent price action forms three consecutive white candles, including a notable long white candle on the latest session closing near its high ($731.84 vs. High: $738.81). This pattern signifies strong buying pressure emerging after a period of consolidation. Key resistance is now evident around the recent swing high near $705.90 (June 5th high) which was convincingly breached. Immediate support resides near the reaction lows around $689.90 (June 9th low) and more significantly at the May 12th breakout point near $709.23 (high volume surge close). The swing low around $476.00 (April 11th) forms a major long-term support level.
Moving Average Theory
The short-term trajectory appears positive with the current price ($731.84) positioned firmly above calculated short and medium-term moving averages. A simulated 50-day MA suggests support near $685, which aligns with recent consolidation lows and was successfully tested in late May/early June. The longer-term 100-day and 200-day MAs project around $625 and $775 respectively. The sustained price above the 50-day and proximity to the longer-term averages suggest an established intermediate uptrend with potential long-term resistance overhead near the 200-day level. The sequence of MAs (50 > 100 > 200) aligns with a bullish long-term trend structure.
MACD & KDJ Indicators
Mentally computed, the MACD likely shows a recent bullish crossover occurring below the zero line during the consolidation in late May/early June. The histogram is increasingly positive, signaling strengthening upward momentum confirming the recent breakout. The KDJ oscillator, particularly the K and D lines, appear to be rising sharply from oversold territory below 30 earlier in June, crossing above 50 recently, indicating a shift from oversold conditions to building upward momentum. J-line is likely extended, suggesting potential for short-term consolidation but without immediate reversal signals. While MACD supports continued upside, the steep KDJ rise warrants monitoring for potential overbought signals near the 80 level.
Bollinger Bands
Simulated bands indicate a significant contraction occurred during the consolidation period between mid-May and early June (around $660-$700), signaling sharply reduced volatility and a potential coiling period. The decisive breakout above the upper band on the latest session ($738.81 vs. estimated Upper Band ~$720-$725) followed by a close firmly above it is a strong bullish signal, often indicating the start of a new volatility expansion phase and a potential continuation of the trend. The breach of the upper band suggests strong momentum, though minor pullbacks towards the mid-line (which aligns with the 50-day MA) could offer entry points.
Volume-Price Relationship
The breakout above $705.90 resistance was accompanied by markedly increasing volume over the past three sessions (901,050 shares vs. 550,527 and 293,532), particularly on the last day, validating the strength of the upward move. Notably, the major surge on May 12th (1.5M shares, +11.20%) established a high-volume support zone near $709.23, reinforcing its significance. The most recent volume surge confirms buyer conviction in breaking key resistance. While some pullback volume may be expected, sustained high volume on advances supports bullish sustainability.
Relative Strength Index (RSI)
Mentally calculated RSI based on the 14-day average gain/loss has likely risen sharply from near or below oversold (<30) territory during the early June consolidation to its current state. Estimated RSI is now likely approaching 60-65 territory. This positions it comfortably below the overbought threshold (>70), indicating room for further potential upside before technical exhaustion becomes a significant concern. RSI divergence, if any, from the May peak seems absent currently; momentum is increasing alongside price on this advance.
Fibonacci Retracement
Applying Fibonacci levels to the significant downtrend from the late February high (~$698) to the mid-April low ($476) reveals crucial retracement zones. The 38.2% retracement rests near $565, while the more critical 61.8% level is approximately $613. The price has decisively reclaimed both these levels. Applying Fibs to the subsequent rally from $476 (April low) to $754.99 (May 14th high) shows the most recent consolidation found support near the 50% retracement level ($615.50), a classic technical bounce point. Resistance is now encountered near the 78.6% ($715) and full retracement ($755) levels, with the current price action testing the 78.6% zone.
Confluence & Key Levels
Confluence of bullish signals is strong near the $705-$710 zone: it represents a breached major resistance level (June 5th high), aligns closely with the 78.6% Fibonacci retracement level ($715) and the high-volume breakout point from May 12th ($709.23). This transforms it into significant support. Upside targets are seen near the prior May 14th peak of $755 and the psychologically important $700 level (now acting as dynamic support). A break above $755 targets the 2025 highs near $930-960. Key support failure levels are $690 (recent swing low) and critically, the $615-$620 Fibonacci/volume support zone. The main divergence noted is that while price made a slightly higher high in mid-May (~$755 vs Apr peak ~$700), the late-April to mid-May advance occurred on generally lower volume than the initial April surge, potentially hinting at weakening momentum during that phase – a factor negated if volume continues expanding on the current uptrend. The weight of evidence currently points towards continued bullishness, supported by breakout confirmation, rising momentum indicators, supportive volume, and moving averages, though awareness of key resistance ($755) and potential for overbought KDJ signals near term is prudent.