Restaurant Brands (QSR) Surges 3.71% on Three-Day Rally Extending 4.63% Cumulative Gain

Restaurant Brands (QSR) has surged 3.71% in the most recent session, extending a three-day rally with a cumulative gain of 4.63%. This upward momentum suggests short-term bullishness, but a deeper technical analysis is required to assess its sustainability and alignment with broader market dynamics. The following sections dissect the stock’s behavior through multiple analytical frameworks.

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Candlestick Theory

The recent three-day rally forms a bullish continuation pattern, characterized by strong closing prices near or at session highs. Key support levels are evident at 67.83 (2025-11-19 close) and 66.23 (2025-11-04 close), with resistance forming at 70.98 (2025-11-21 high). A breakdown below 67.83 could trigger a test of the 65.69 (2025-10-31 close) level, while a breakout above 70.98 may target the 71.36 (2025-07-24 high) psychological barrier. The candlestick structure indicates strong buying pressure, but bearish divergence in the RSI and KDJ indicators (discussed later) may hint at potential exhaustion.

Moving Average Theory

The 50-day moving average (approximately 67.4–68.0) currently sits below the 200-day MA (~66.3–66.7), indicating a bearish intermediate-term trend. However, the stock’s recent rally has pushed it above the 50-day MA, suggesting short-term strength. The 100-day MA (~67.1–67.5) acts as a critical threshold: a sustained close above this level could signal a shift in medium-term sentiment. The confluence of the 50-day and 100-day MAs near 67.5 suggests a potential consolidation zone ahead.

MACD & KDJ Indicators

The MACD histogram has expanded positively, reflecting accelerating bullish momentum, though the signal line remains below the zero level, indicating a lack of long-term confirmation. The KDJ stochastic oscillator shows overbought conditions (K=85, D=75), with the %K line diverging from price highs observed in late October and early November. This divergence may foreshadow a pullback, though a sustained close above 69.14 (2025-11-12 high) could invalidate this bearish signal.

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Bollinger Bands

Bollinger Bands have expanded following the recent rally, with the 20-day MA (68.0–69.0) acting as a dynamic support/resistance level. The stock’s current price of 70.51 sits above the upper band, indicating overbought conditions and heightened volatility. A retest of the lower band (~65.0–66.0) is likely if volatility contracts, but this scenario depends on volume patterns and broader trend alignment.

Volume-Price Relationship

Trading volume has surged on recent up days, validating the rally’s strength. For example, the 2025-11-21 session saw 4.24 million shares traded, the highest volume in over a month. However, volume has not yet reached the levels seen during the July 2025 rally (over 5 million shares/day), suggesting caution about the sustainability of the current move. Divergence between volume and price may emerge if buying pressure wanes.

Relative Strength Index (RSI)

The 14-day RSI has pushed into overbought territory (>70), aligning with the KDJ divergence. While this typically signals a potential correction, RSI overbought conditions in strong uptrends can persist for weeks. A drop below 60 would indicate weakening momentum, but a sustained close above 65 could suggest the trend remains intact.

Fibonacci Retracement

Key Fibonacci levels from the 2025-02-24 low (62.04) to the 2025-04-11 high (71.68) include 65.5 (38.2% retracement) and 68.5 (61.8% retracement). The current price of 70.51 has surpassed the 61.8% level, suggesting the 71.68 psychological barrier (100% retracement) is the next target. A breakdown below 68.5 could trigger a retest of 65.5, though the recent volume surge implies short-term buyers are entrenched.

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Backtest Hypothesis

The proposed strategy of buying Restaurant Brands when RSI exceeds 70 and selling when it falls below 70 has historically underperformed, with a -25.6% annualized return and a $1.6 billion loss from 2022 to 2025. This outcome aligns with the current analysis, where overbought conditions are accompanied by KDJ divergence and Bollinger Band expansion. The strategy’s failure likely stems from the stock’s tendency to remain overbought during strong trends, leading to premature sell signals. A revised approach—incorporating confluence with moving averages and volume—might improve efficacy. For instance, entering long positions only when RSI >70, the 50-day MA crosses above the 200-day MA, and volume confirms strength could mitigate false signals. However, given the recent divergence in momentum indicators, a wait-and-see approach may be prudent until the 67.5–68.5 consolidation zone resolves.