Quanta Services (PWR) Surges 6.79% in Two-Day Rally as Technical Analysis Hints at Bullish Momentum and Overbought Conditions

Quanta Services (PWR) has surged 4.27% in the most recent session, marking its second consecutive day of gains with a cumulative 6.79% rise. The price action reflects a strong bullish momentum, with the stock closing at $466.75 after trading within a $455.71–$480.93 range. This move suggests potential short-term strength, but further analysis of technical indicators is needed to assess sustainability and potential reversals.

Candlestick Theory

Recent candlestick patterns indicate a bullish continuation. The two-day rally has formed a "higher high, higher low" structure, with the closing price above the prior week’s key resistance at $447.64. A critical support level appears at $437.07 (2026-01-14 low), which has held during prior pullbacks. The recent price action also forms a "bullish engulfing" pattern, where the latest candle (a large white candle) completely covers the previous session’s bearish candle. This suggests strong buying pressure, though a breakdown below $437.07 could invalidate the uptrend.

Moving Average Theory

The 50-day moving average (approximately $430–$440 based on recent data) currently sits below the 200-day average (~$410–$420), indicating a long-term bullish trend. The 100-day average (~$435–$445) aligns with the current price, suggesting a consolidation phase. The stock’s recent surge has brought it closer to the 50-day MA, which may act as a dynamic support level. A crossover above the 200-day MA would reinforce the bullish case, while a drop below the 100-day MA could signal weakening momentum.

MACD & KDJ Indicators

The MACD line has crossed above the signal line, forming a bullish "golden cross", with the histogram expanding, indicating growing momentum. The KDJ oscillator shows the %K line above %D, with both lines trending upward, suggesting overbought conditions (K near 80–90). While this may indicate a short-term pullback is due, the divergence between the MACD and KDJ (MACD remains strong while KDJ shows overbought exhaustion) suggests caution. A bearish crossover in KDJ could precede a correction, but the MACD’s strength implies the uptrend may persist.

The recent rise in momentum indicators also aligns with the stock’s current position near the upper Bollinger Band.

Bollinger Bands

Volatility has increased, with the bands expanding after a period of contraction in late December. The current price of $466.75 is near the upper band (~$470–$480), indicating overbought territory. This positioning raises the probability of a retest of the lower band (~$430–$440). A break above the upper band would confirm a new bullish phase, while a drop below the middle band (~$450) could trigger a selloff.

Volume-Price Relationship

Trading volume has surged in recent sessions, with the most recent day’s volume (2.2 million shares) exceeding the 30-day average by ~30%. This volume surge supports the price increase, indicating strong institutional buying. However, the declining volume on pullback days (e.g., 1.02 million on 2026-01-08) suggests weaker bearish conviction. If volume tapers during the next rally, it may signal waning momentum, even if the price continues higher.

Relative Strength Index (RSI)

The 14-day RSI has crossed above 70, confirming overbought conditions. While this does not guarantee a reversal, historical data shows a 60–70% probability of a pullback after such levels. The RSI has formed a "top divergence" compared to the MACD, as price makes a higher high while RSI fails to do so. This divergence increases the likelihood of a near-term correction, particularly if the RSI drops below 60.

Fibonacci Retracement

Key Fibonacci levels derived from the January 2026 high ($480.93) to the December 2025 low ($381.93) include 38.2% at $443, 50% at $431, and 61.8% at $419. The current price is near the 38.2% retracement level, which may act as a temporary resistance. A break above $443 could target the 50% level (~$431), while a breakdown below $431 would likely test the 61.8% level (~$419).

The analysis reveals confluence between the RSI overbought condition and the KDJ divergence, suggesting a high probability of a near-term correction. However, the MACD’s strength and expanding Bollinger Bands indicate that volatility may persist. Traders should monitor the 50-day MA and $437.07 support level for trend confirmation. While the short-term overbought conditions and Fibonacci retracement levels suggest a pullback is likely, the broader moving average alignment and volume dynamics imply the uptrend could resume after consolidation. Divergences between momentum indicators and price highlight the need for caution, particularly as overbought conditions may precede a reversal.