On Semiconductor Surges 11.01% on 8-Day Rally as Technical Indicators Signal Overbought Conditions and Possible Correction

On Semiconductor (ON) has surged 11.01% in the most recent session, marking an 8-day winning streak with a cumulative gain of 27.28%. This aggressive rally warrants a comprehensive technical analysis to assess sustainability and potential reversal signals.
Candlestick Theory
The recent price action exhibits strong bullish momentum, characterized by higher highs and higher lows over the past eight sessions.

Key resistance levels emerge at the recent high of $57.52 (2025-12-03) and the Fibonacci 61.8% retracement level (~$54.00), while critical support is identified at the 2025-11-19 low of $45.96. A bullish engulfing pattern formed on 2025-12-03, with the closing price ($57.15) significantly above the prior session’s range, suggesting continued buying pressure. However, the absence of a bearish reversal pattern like a shooting star or dark cloud cover implies the uptrend may persist unless a breakdown below $51.49 (2025-12-02 low) occurs.
Moving Average Theory
Short-term momentum aligns with the 50-day moving average (estimated ~$50.00–$52.00), which is well above the 200-day MA (~$47.00–$49.00), indicating a strong bullish bias. The 100-day MA (~$49.50–$51.50) further reinforces this trend. The current price of $57.15 sits comfortably above all three, signaling a multi-timeframe uptrend. However, the narrowing gap between the 50-day and 100-day MAs suggests a potential slowdown in acceleration, warranting caution on overextended positions.
MACD & KDJ Indicators
The MACD (12,26) has crossed above the signal line with a histogram expansion, confirming bullish momentum. The KDJ stochastic oscillator shows the K line at 85 and D line at 75, indicating overbought conditions. While this suggests a short-term pullback is possible, the absence of bearish divergence (price highs vs. oscillator highs) implies the uptrend may persist. A bearish crossover in KDJ or MACD below the signal line could trigger a correction toward $51.49–$50.43.
Bollinger Bands
Volatility has expanded, with the price near the upper Bollinger Band (~$57.50) on 2025-12-03, a classic overbought condition. The 20-period band width is at its widest in recent months, suggesting a potential contraction and consolidation phase. A retest of the lower band (~$49.00) could occur if volatility subsides, but the current positioning near the upper band raises caution about overextending long positions.
Volume-Price Relationship
Trading volume has surged to 13.56 million shares on 2025-12-03, a 30% increase from the prior session, validating the recent breakout. However, volume has been declining in the final days of the rally (e.g., 10.38M on 2025-11-28), hinting at waning buying interest. A divergence between price and volume could signal a near-term pause, particularly if volume fails to rise on new highs.
Relative Strength Index (RSI)
The 14-day RSI is near 75–80, confirming overbought territory. While this does not guarantee a reversal, it highlights the risk of a pullback. A close below 60 would suggest weakening momentum, whereas a sustained RSI above 70 may indicate continued strength. The absence of bearish divergence (price highs vs. RSI highs) reduces the immediate reversal risk.
Fibonacci Retracement
Key retracement levels from the recent high ($57.52) to the prior low ($44.90) include 38.2% (~$53.00), 50% (~$51.20), and 61.8% (~$49.40). A pullback to the 50% level could attract buyers, but a breakdown below $49.40 would target the 78.6% level (~$44.90).
Confluence and Divergence
The most compelling confluence occurs at $51.49–$50.43, where support from Fibonacci, prior lows, and Bollinger Bands converge. A breakdown here would align with overbought RSI and weakening volume, increasing the probability of a correction. Conversely, a close above $57.52 would invalidate bearish signals and extend the uptrend. Divergences between KDJ and price are currently absent, reducing the urgency of a reversal.

Probabilistic Outlook
The immediate bias remains bullish, supported by momentum indicators and Fibonacci levels. However, overbought conditions and waning volume suggest a consolidation phase is likely. Traders may consider tightening stop-losses below $51.49 while monitoring RSI and KDJ for bearish signals. A breakout above $57.52 would enhance conviction, whereas a close below $50.43 would heighten bearish probabilities.