Prologis PLD Rallies 10.37% in Three Days as Technical Analysis and Backtest Strategy Show 79.77% Gains

Prologis (PLD) Technical Analysis

Prologis has experienced a significant three-day rally, surging 6.33% on the most recent session and accumulating a 10.37% gain over the past three trading days. This sharp upward momentum, combined with elevated trading volume and price proximity to key technical levels, warrants a multi-dimensional analysis.

Candlestick Theory

The recent price action forms a bullish continuation pattern, with the three-day rally resembling a "three white soldiers" formation, indicating strong institutional buying pressure. Key support levels are identified at $111.81 (2025-10-14 low) and $110.98 (2025-09-10 close), while immediate resistance lies at $122.76 (2025-10-15 close). The absence of bearish reversal patterns like "dark cloud cover" or "evening star" suggests the uptrend remains intact, though a pullback to test the $115.45 level (2025-10-14 close) could confirm its robustness.

Moving Average Theory

Short-term momentum aligns with a bullish crossover, as the 50-day moving average (approximately $115.50) has crossed above the 200-day moving average (around $113.00), signaling a "golden cross." The 100-day MA ($114.50) further reinforces the uptrend. However, the 200-day MA acting as a dynamic support zone at $113.00 suggests that a breakdown below this level could trigger a reevaluation of the intermediate-term trend.

MACD & KDJ Indicators

The MACD histogram has expanded positively over the past three sessions, with the MACD line crossing above the signal line, reinforcing the bullish bias. The KDJ oscillator, currently in overbought territory (K at 85, D at 78), indicates potential exhaustion, though the lack of divergence between price and momentum suggests the rally may persist. A bearish crossover in the KDJ oscillator would heighten caution, but confluence with other indicators is needed to confirm a reversal.

Bollinger Bands

Volatility has spiked, with the 20-day Bollinger Bands widening from a 1.5% range to a 3.5% range. The price remains near the upper band, suggesting continued strength, but a retest of the lower band ($111.03, 2025-10-10 low) could trigger a consolidation phase. Band contraction observed in early October (e.g., 2025-09-30 to 2025-10-02) preceded the recent breakout, signaling a potential continuation of the trend.

Volume-Price Relationship

Trading volume has surged to 7.99 million shares on the most recent rally, a 2.5x increase compared to the prior week’s average of 3.15 million. This volume expansion validates the strength of the price move, as rising volume typically precedes sustained trends. However, a divergence between price highs and volume (e.g., lower volume on subsequent rally days) could signal weakening conviction.

Relative Strength Index (RSI)

The RSI has entered overbought territory (72 on 2025-10-15), a common occurrence during strong breakouts. While this does not necessarily indicate an impending reversal, it suggests heightened sensitivity to overcorrections. A move below 50 would signal a shift in momentum, though the current RSI trajectory remains aligned with the uptrend.

Fibonacci Retracement

Key retracement levels from the recent high of $122.76 to the October 10 low of $111.23 are at $117.29 (38.2%) and $114.52 (61.8%). These levels are critical for assessing potential pullbacks. The 61.8% retracement coincides with the 200-day MA, creating a confluence of support that could attract buyers.

Backtest Hypothesis

The proposed strategy of entering long positions on MACD and KDJ golden cross signals, with a 10-day holding period, demonstrates a compelling backtest result of 79.77% total return from 2022 to 2025. This outperforms the benchmark by 41.57% and achieves a Sharpe Ratio of 0.66, indicating reasonable risk-adjusted returns. However, the absence of NASDAQ stocks in the backtest sample (despite Prologis being a NASDAQ-listed security) raises questions about the strategy’s applicability here. While the technical indicators currently align with the strategy’s entry criteria, the lack of historical NASDAQ-specific data suggests the need for caution. A modified approach incorporating Fibonacci retracement levels and volume confirmation could enhance the strategy’s adaptability to Prologis’s price action.