Restaurant Brands (QSR) Surges 1.18% as Bullish Candlestick Pattern Targets $67.68–$68.60 Breakout

Candlestick Theory

Restaurant Brands (QSR) has exhibited a bullish candlestick pattern over the past three trading days, with a 1.18% gain closing at $68.48. The price action suggests a potential breakout above a key resistance cluster near $67.68–$68.60, identified by recent highs in early August and mid-September. A rising wedge pattern is forming, characterized by higher lows and converging trendlines, which historically signals continuation in an uptrend but carries bearish implications if the price fails to break above $68.60. Support levels are evident at $64.14 (September 30 low) and $63.48 (September 11 low), with a breakdown below $63.48 likely to trigger further selling pressure.

Moving Average Theory

Short-term bullish momentum is reinforced by the 50-day moving average (50-DMA) at ~$67.00, which has acted as dynamic support since mid-September. The 100-day moving average (100-DMA) at ~$66.50 and 200-day moving average (200-DMA) at ~$66.00 remain below the current price, confirming an uptrend. However, the 50-DMA is approaching the 100-DMA, suggesting a potential slowdown in upward momentum. A sustained close above the 50-DMA would strengthen the bullish case, while a retest of the 100-DMA could trigger a pullback if the 50-DMA fails to hold.

MACD & KDJ Indicators

The MACD histogram has turned positive, with the MACD line crossing above the signal line in early October, confirming a bullish crossover. The KDJ oscillator (stochastic) shows the price in overbought territory (K=85, D=80), indicating a potential near-term correction. However, a divergence exists between the MACD and KDJ: while the MACD remains strong, the KDJ suggests overbought conditions may pressure the price lower. This confluence of signals implies caution for short-term traders, with a key watchpoint at $67.68 (September 26 high).

Bollinger Bands

Volatility has expanded since mid-September, with the price trading near the upper Bollinger Band ($68.60). This suggests strong buying pressure but also heightened risk of a pullback. The 20-period Bollinger Bands indicate the price is ~2 standard deviations above the midline, a level that often precedes a mean reversion. A break above the upper band could extend the rally, but a retest of the midline ($66.50) is likely if the upper band fails to hold.

Volume-Price Relationship

Trading volume has surged in recent sessions, peaking at 8.7 million shares on October 2, validating the recent price increase. However, volume has declined slightly on the past two days despite continued gains, hinting at potential exhaustion in the rally. Sustained volume above 2.5 million shares per session would support the bullish case, while a drop below 1.5 million could signal weakening momentum.

Relative Strength Index (RSI)

The RSI has reached overbought territory (~70), suggesting a high probability of a short-term correction. While the RSI remains above 50, it has failed to form a bearish divergence with price, indicating the uptrend may persist. A drop below 60 would confirm a pullback, but a rebound above 60 could extend the rally.

Fibonacci Retracement

Key Fibonacci levels from the recent $64.14–$68.60 range include 38.2% at $66.30 and 50% at $66.37. The price has held above the 50% level, suggesting a healthy correction. A breakdown below $66.37 would target the 61.8% retracement at $64.48, aligning with the September 15 high.

Backtest Hypothesis

A backtest of the RSI overbought strategy (2022–2025) reveals mixed results: 39 events with a 41.03% win rate over 3 days, 51.28% over 10 days, and 46.15% over 30 days. Average returns are -0.63% (3 days), +0.67% (10 days), and +0.31% (30 days), with a maximum gain of 2.92% on day 59. This suggests the strategy is marginally profitable over 10-day horizons but underperforms in the short term. The recent expansion in Mexico (300+ new restaurants) could drive long-term upside, but technical indicators (overbought RSI, divergent KDJ) imply caution for near-term entries. Optimizing the strategy by combining RSI with Bollinger Band reversion or 50-DMA crossovers may improve accuracy.