NetApp Shares Jump 4.5% to $117.22 on Bullish Technicals and Heavy Volume

NetApp (NTAP) shares advanced 4.54% to close at $117.22 in the most recent session, marking the second consecutive daily gain and bringing the two-day rally to 7.14%. This upward momentum occurred on elevated volume of 4.68 million shares traded, significantly above the 30-day average. The price action established a new local high at $117.42 after bouncing from the previous session's low of $108.61.
Candlestick Theory
Recent sessions show bullish confirmation patterns. The August 28 candle formed a robust bullish marubozu (minimal lower shadow) after testing support near $108.60, indicating strong buying pressure throughout the session. This follows a bullish engulfing pattern from August 22–27 where prices absorbed the prior downtrend. Immediate resistance is evident at $117.42 (today's high), with secondary resistance at the February swing high of $127.78. Support converges near $108.60 (August 28 low) and the psychological $100 level.
Moving Average Theory
The 50-day, 100-day, and 200-day moving averages are sequentially aligned ($109.50, $104.80, $98.30 respectively), confirming a sustained bullish trend. The August 28 close at $117.22 positions the price 7.1% above the 50-day MA, reflecting strong short-term momentum. Notably, the Golden Cross (50-day above 200-day) has been intact since early May. The rising 200-day MA slope substantiates the long-term uptrend, though the widening gap between price and the 50-day MA may suggest near-term consolidation.
MACD & KDJ Indicators
The MACD histogram has turned positive after a bullish crossover on August 27, with both signal line and MACD line trending upward. Concurrently, the KDJ indicator shows the %K line (80) crossing above %D (75) in overbought territory. While both oscillators agree on bullish momentum, the KDJ’s overbought reading (above 80) signals potential exhaustion. Historical divergences occurred in late July when KDJ peaked while MACD flattened, preceding a 9% correction—no such divergence is currently evident.
Bollinger Bands
Bollinger Bands expanded sharply during the August 28 rally, with price breaking above the upper band ($115.20). This typically indicates strong directional momentum but also suggests a short-term overextended condition. The 20-day average volatility (basis for bands) rose to 2.5%, the highest in three weeks. Mean reversion toward the $112 midline may occur if volume subsides, though sustained bands expansion could support further upside.
Volume-Price Relationship
Volume surged 39% during the breakout, validating the bullish price action. Accumulation is evident as advances (like August 17 and August 28) occur on above-average volume, while pullbacks (August 21-26) materialize on diminishing volume. The volume-weighted average price (VWAP) sits at $110.80, now acting as dynamic support. The volume spike at resistance breaches demonstrates conviction, though continuation requires volume persistence.
Relative Strength Index (RSI)
The 14-day RSI reached 73 today, crossing into overbought territory. While this warns of potential consolidation, its upward slope and prior breakout from a bearish divergence (July peak at 70 without new price highs) mitigate immediate reversal risks. Historically, NTAP has maintained RSI above 70 for 5-8 sessions during strong trends (e.g., late January). A decisive break above 75 would reinforce momentum, while failure to hold 70 may trigger profit-taking.
Fibonacci Retracement
Applying Fibonacci to the swing low of $76.10 (April 4) and high of $117.42 (August 28) reveals key levels: 23.6% ($106.80), 38.2% ($100.60), and 50% ($96.75). The recent consolidation around $107–$112 respected the 23.6% retracement as support during pullbacks. The $106.80 level now serves as critical near-term support. A sustained breakout above the 138.2% extension ($120.90) could signal trend acceleration, though overbought oscillators and historical resistance near $118 warrant caution.