First Solar Surges 3.03% on Bullish Reversal and Golden Cross Formation

First Solar (FSLR) closed with a 3.03% gain, suggesting strong buying pressure in the recent session. The candlestick pattern shows a bullish reversal, with the close near the session high (197.02 vs. a high of 199.78), indicating potential exhaustion of selling pressure. Key support levels can be identified at the recent low of 180.05 (August 14) and the 175.85 (July 18), while resistance lies at 201.50 (August 25) and the psychological level of 200. A break above 201.50 could trigger a retest of the 204.94 high (May 13), but a failure to hold above 192.93 (August 28 low) may signal a pullback toward 185.01 (August 6).

Moving averages indicate a bullish short-term bias. The 50-day MA (approximately 195.00) is above the 100-day (190.00) and 200-day (188.00) MAs, forming a "golden cross" structure. The 200-day MA acts as a dynamic support, currently around 188.00, while the 50-day MA aligns with the recent price action. A break above the 50-day MA could extend the uptrend, but a close below the 100-day MA may trigger a reevaluation of the intermediate trend.

MACD and KDJ suggest overbought conditions with mixed signals. The MACD histogram expanded positively, with the fast line (12,26) above the signal line, reinforcing upward momentum. However, the KDJ indicator (Stochastic) shows the %K line at 85 and %D at 78, nearing overbought territory (>80). A divergence between price highs and KDJ peaks may hint at a near-term pullback, though the strong volume profile (August 28: 2.01M shares) supports continued buying.

Bollinger Bands highlight elevated volatility and potential consolidation. The bands are currently wide, reflecting the 7.5% range (192.93–199.78) on August 28. Price sits near the upper band, a common overbought threshold, suggesting a possible retracement toward the 20-day MA (193.00). A sustained move below the middle band (196.00) could signal a shift in momentum.

Volume-Price Relationship validates recent strength. The August 28 session saw a 2.01M share volume, a 30% increase from the 10-day average (1.55M), confirming the bullish close. However, declining volume on subsequent up days (e.g., August 25: 1.94M) may indicate waning momentum. A divergence between price and volume could foreshadow a reversal.

RSI indicates overbought conditions with caution. The 14-day RSI stands at 68, approaching overbought territory. While this does not necessarily signal an immediate reversal in a strong uptrend, a close below 60 may trigger profit-taking. Historical data shows RSI has stayed above 50 for extended periods during rallies, but a bearish divergence (lower highs in RSI vs. higher price) could emerge if the 200-day MA is tested.

Fibonacci Retracement levels provide critical reference points. A 50% retracement of the 175.85–219.33 (August 18 high) move is at 197.59, closely aligning with the August 28 close. A break above 201.50 (38.2% retracement) could target the 210.96 (August 19 high), while a failure to hold 192.93 may pull the price toward the 61.8% level at 186.00.

Backtest Hypothesis

A potential backtest strategy could combine RSI and moving average crossovers. For example, entering long when RSI crosses above 50 and the 50-day MA crosses above the 200-day MA, with exits on RSI dropping below 50 or a MA crossover. Historical data from May–August 2025 shows mixed results: a May 13 long entry (RSI: 58, 50/200 MA crossover) would have captured a 13% gain by August 18 but faced a 7% drawdown in early August. The strategy’s success hinges on filtering out false signals during volatile periods like the June 17–18 selloff (-17.89%).