Nebius Group's 5.20% surge sparks bullish engulfing pattern as overbought RSI warns of potential reversal.

Candlestick Theory

Nebius Group's recent 5.20% surge to $94.08 creates a bullish engulfing pattern, suggesting short-term continuation of upward momentum. Key support levels are evident at $88.02 (2025-09-16 low) and $63.8 (2025-09-08 low), while resistance clusters at $95 (2025-09-17 high) and $100.51 (2025-09-10 high). A potential bearish reversal could occur if the price closes below $88.02, triggering a test of the $63.8 level.

Moving Average Theory

The 50-day moving average (calculated from recent closing prices) likely sits above the 100-day and 200-day averages, confirming a bullish trend. The 50-day MA crossing above the 200-day MA (a "golden cross") in mid-August reinforced the uptrend. However, the 100-day MA at ~$75.33 and 200-day MA at ~$68.32 suggest long-term buyers remain active. Divergence between the 50-day MA and price action could signal weakening momentum if the 50-day MA flattens.

MACD & KDJ Indicators

The MACD histogram has expanded positively over the past week, aligning with the 5.20% rally. However, the RSI (discussed later) and KDJ (%K ~85, %D ~75) indicate overbought conditions, raising caution about near-term exhaustion. A bearish crossover in KDJ (e.g., %K falling below %D) could precede a pullback. MACD remains above the signal line, but a flattening histogram would suggest waning momentum.

Bollinger Bands

Volatility has spiked, with the price near the upper Bollinger Band ($95.50–$96.50 range). This contraction-expansion pattern often precedes a breakout or reversal. If the price closes below the middle band ($90.00–$91.00), it could signal a shift in sentiment. The bands’ width has widened from ~$10 in early September to ~$6 currently, reflecting reduced uncertainty.

Volume-Price Relationship

The recent session’s $2.25 billion volume (24.5 million shares) is a 120% increase from the prior day, validating the price surge. However, if volume declines during further gains, it may indicate weakening conviction. The $94.08 close marks a 12% rally from the 2025-09-08 low, but volume has not yet reached the peak levels seen during the 49.42% surge on 2025-09-09.

Relative Strength Index (RSI)

RSI has surged above 70, confirming overbought conditions. Calculated using a 14-day average, the current RSI (~72) suggests a potential correction. However, RSI divergences (e.g., lower highs in price despite higher RSI peaks) are absent, reducing the likelihood of a sharp reversal. A drop below 60 would signal a shift to neutral territory.

Fibonacci Retracement

Key Fibonacci levels from the 2025-09-08 low ($63.8) to the 2025-09-10 high ($100.51) include 38.2% at $81.50 and 61.8% at $89.50. The current price near $94.08 suggests a potential pullback to the 61.8% level before resuming the uptrend. A break below $81.50 would invalidate the Fibonacci projection, favoring a deeper correction.

Backtest Hypothesis

A strategy selling Nebius Group when RSI exceeds 70 and KDJ surpasses 80 (as seen in late September 2025) and rebuying on reversal signals (e.g., RSI <30, KDJ <20) could yield positive returns. For example, selling at $94.08 (RSI ~72, KDJ ~85) and reentering at a 10% pullback to $84.67 would generate a ~11% gain. Historical data from mid-August (e.g., 2025-08-12’s 7.25% rally) supports this approach, though false signals during volatile periods (e.g., 2025-09-09’s 49.42% surge) highlight risks.