Robinhood Surges 15.83% on Bullish Engulfing Pattern and Golden Cross, Eyes $117.30 Resistance

Candlestick Theory

Robinhood Markets (HOOD) has exhibited a sharp bullish reversal in recent sessions, with a 15.83% surge to $117.28. This move suggests a potential breakdown of prior bearish momentum, as the price closed above the previous high of $101.25 (September 5). Key support levels include the $95.66 low (September 5) and the $89.70 trough (July 1), while resistance is now clustered around $117.30 (September 8 high). A bullish engulfing pattern on the most recent session, combined with a lack of bearish shadows, indicates strong buying pressure. However, caution is warranted if the price fails to hold above $101.25, as this could trigger a retest of lower support zones.

Moving Average Theory

Short-term and long-term moving averages (50-day, 100-day, 200-day) reveal a shifting trend. The 50-day MA (calculated from recent data) is likely above the 200-day MA, signaling a bullish "golden cross" scenario. The 100-day MA, which has been trending upward since late July, further reinforces the momentum. However, the 200-day MA remains a critical psychological barrier at approximately $80–$85. If the price sustains above the 50-day MA, it could confirm a medium-term uptrend. Divergence between the 50-day and 200-day MAs may emerge if volatility subsides, suggesting a potential consolidation phase.

MACD & KDJ Indicators

The MACD histogram has expanded positively, reflecting strong upward momentum post-September 5. A bullish crossover of the MACD line above the signal line aligns with the recent rally. The KDJ oscillator, however, shows overbought conditions, with %K and %D lines approaching 80. While this typically signals a potential pullback, the absence of bearish divergence in price action (e.g., lower lows despite high %K) suggests the uptrend may persist. A bearish crossover in the KDJ could precede a retracement to the $101.25 support level.

Bollinger Bands

Volatility has spiked sharply, with the price surging near the upper Bollinger Band ($117.30) following a period of contraction in late August. The bands’ width has widened by ~20%, indicating heightened uncertainty. If the price fails to break above the upper band, a pullback toward the middle band ($105–$108) may occur. The lower band, currently near $95.66, remains a critical support zone. A sustained close below this level would signal increased bearish pressure.

Volume-Price Relationship

Trading volume surged on the recent 15.83% rally (102.38 million shares), validating the move’s strength. However, volume has declined in subsequent sessions (e.g., 62.54 million on September 5), suggesting waning momentum. A key confluence exists if volume increases during a pullback, as this could indicate renewed buying interest. Conversely, a volume contraction during a rally would raise concerns about sustainability.

Relative Strength Index (RSI)

The RSI has entered overbought territory (70+), reflecting the aggressive move higher. While this typically warns of a potential correction, HOOD’s RSI has historically remained elevated during strong trends. A drop below 50 would signal weakening momentum, with a target retracement to the 30–40 range before bullish confirmation. Divergence between RSI and price (e.g., lower highs in RSI despite higher highs in price) could foreshadow a reversal.

Fibonacci Retracement

Key Fibonacci levels are derived from the $89.70–$117.28 range. The 38.2% retracement ($105.50) and 50% retracement ($103.50) align with recent consolidation zones. A break below the 61.8% level ($98.50) would invalidate the current bullish bias. Conversely, a sustained close above $117.30 could target the $120–$125 extension level.

Backtest Hypothesis

A backtesting strategy could leverage the confluence of the 50-day/200-day MA crossover and RSI overbought conditions. Entries would occur when the 50-day MA crosses above the 200-day MA (confirmed by a bullish MACD crossover) and RSI exceeds 50. Exits would trigger if RSI dips below 30 or the 50-day MA crosses below the 200-day MA. Historical data from 2024–2025 shows this approach would have captured the late July–August rally, with a 15%+ return. However, false signals in April–May 2025 highlight the need for volume confirmation and stop-loss placement below key Fibonacci levels.