Roblox’s 6.63% Rally Sparks Bullish Signals as Golden Cross and RSI Near Overbought

Candlestick Theory

Roblox’s recent price action suggests a bullish continuation pattern, with a five-day upward trend and a 6.63% gain. Key support levels emerge around the 122.69 (2025-09-03 low) and 118.49 (2025-08-20 close), while resistance is clustered near 138.52 (2025-09-30 high) and 141.56 (2025-09-29 close). A bullish engulfing pattern formed on October 14, with the candle’s body exceeding prior bearish candles, signaling potential momentum. However, a potential bearish divergence is observed in the 126.8–128.24 range, where prices advanced but volume waned, hinting at weakening buying pressure.

Moving Average Theory

Short-term bullish bias is reinforced by the 50-day MA (130.50) crossing above the 200-day MA (124.30), a "Golden Cross" suggesting upward momentum. The 100-day MA (128.70) acts as a dynamic support, currently below the 200-day MA, indicating intermediate-term strength. Prices have traded above the 50-day MA for 12 consecutive days, aligning with a strong uptrend. Divergence arises between the 50-day and 200-day MAs: the 50-day MA’s steep slope contrasts with the 200-day MA’s flattening trajectory, suggesting potential overextension in the near term.

MACD & KDJ Indicators

The MACD (12.30) crossed above its signal line (8.10) on October 14, confirming a bullish crossover. The histogram’s expansion from -3.20 to +12.30 underscores accelerating momentum. However, the KDJ indicator shows mixed signals: the K line (88.2) near overbought territory (70+) contrasts with the D line (75.4), suggesting a possible near-term correction. A bearish KDJ divergence is observed between October 7–10, where prices rose but the K line declined, warning of a potential pullback.

Bollinger Bands

Volatility has expanded recently, with the upper band at 141.56 (2025-09-29) and lower band at 122.69 (2025-09-03). The current price (133.28) sits near the mid-band, indicating a neutral position. The 20-day historical volatility (13.2%) has increased from 9.8% in early October, aligning with the recent breakout. A contraction in the bands is observed from October 6–13, suggesting a potential breakout or breakdown phase.

Volume-Price Relationship

Trading volume surged to $1.14B on October 14, a 120% increase from the prior week, validating the price rally. However, volume declined to $570M on October 13 despite a 1.14% price gain, signaling weakening conviction. A positive volume-price divergence is noted between October 8–10, where volume spiked during price consolidation, suggesting accumulation.

Relative Strength Index (RSI)

The 14-day RSI (68.3) is approaching overbought territory (70+), indicating potential exhaustion. A bearish signal emerges if RSI fails to close above 70, though a rebound to 60–65 would reinforce the uptrend. Divergence is observed in mid-October, where prices hit a three-month high while RSI peaked at 62.5, suggesting a possible retracement.

Fibonacci Retracement

Key retracement levels from the October 3–14 rally (122.69–133.28) are: 23.6% (130.40), 38.2% (128.75), and 61.8% (125.90). The 38.2% level aligns with the 100-day MA (128.70), acting as a critical support. A breakdown below 125.90 would target the 61.8% level (122.69), a prior psychological support.

Backtest Hypothesis

The KDJ Top Divergence strategy from 2022–2025 demonstrates a 71.43% win rate over 30 days, with a maximum return of 10.30% on day 55. However, recent events like ARK’s RBLX share sale and legal risks introduce uncertainty. The strategy’s efficacy may be tempered by regulatory risks and short-term bearish sentiment, though long-term fundamentals (e.g., Morgan Stanley’s $300 price target) remain intact. Transaction costs and slippage could reduce profitability, necessitating caution in execution.