Sony Surges 3.60% to ¥28.74 on Bullish Technical Signals and Strong Buying Pressure

Sony Group (SONY) closed the most recent session with a 3.60% gain, reaching ¥28.74, reflecting robust short-term momentum. This surge aligns with broader technical signals suggesting a continuation of bullish dynamics. Below is a structured analysis across key methodologies:

Candlestick Theory

The recent price action exhibits a bullish engulfing pattern, where the prior bearish candle (¥27.74 close) is completely subsumed by the subsequent bullish session (¥28.74 close). This pattern, coupled with the price closing near the session’s high, indicates strong buying pressure. Key support levels are identified at ¥27.74 (prior close) and ¥26.03 (July 31 low), while resistance clusters form at ¥29.16 (August 15 high) and ¥25.60 (July 24 high). A breakdown below ¥27.74 could trigger a retest of ¥24.92 (August 5 low), with Fibonacci retracement levels (38.2% at ¥26.95, 50% at ¥27.35) acting as potential pivot points.

Moving Average Theory

The 50-day MA (¥25.65) currently outperforms the 200-day MA (¥24.45), confirming an uptrend. The 100-day MA (¥25.80) is converging with the 50-day, suggesting intermediate-term alignment. The price’s proximity to the 50-day MA (¥28.74 vs. ¥25.65) implies short-term strength, though a cross above the 200-day MA would reinforce bullish sentiment. Divergences are minimal, with all MAs sloping upward, signaling sustained momentum.

MACD & KDJ Indicators

The MACD histogram has transitioned from negative to positive territory, with a golden cross occurring recently, validating the backtest strategy’s efficacy. The KDJ oscillator shows %K (stochastic line) rising above %D (signal line), indicating strengthening momentum. RSI, at ~75 (overbought), suggests caution, though sustained volume and bullish price action may delay a correction. The KDJ %D line at 68.5% aligns with MACD’s bullish bias, creating a confluence of momentum indicators.

Bollinger Bands

The price is currently near the upper band (¥29.16), with a 15-day volatility expansion observed. This suggests heightened volatility and potential for continuation, provided the 20-day MA (¥28.00) holds. A break above ¥29.16 could trigger a retest of ¥30.00, while a drop below ¥27.19 (lower band) would signal a potential pullback toward ¥26.03.

Volume-Price Relationship

Trading volume spiked to ¥149.26 million on the 3.60% rally, exceeding the 30-day average of ¥100 million. This surge validates the price action’s sustainability, as increased volume typically confirms trend strength. However, divergences may emerge if volume declines during subsequent rallies without price follow-through.

Relative Strength Index (RSI)

The RSI stands at 75, indicating overbought conditions. While this may precede a correction, the RSI’s recent ascent from 50 to 75—paired with a bullish MACD—suggests the trend remains intact. A drop below 60 would signal weakening momentum, though a rebound above 70 could prolong the uptrend.

Fibonacci Retracement

Key retracement levels from the ¥24.32 (July 31 low) to ¥28.74 (August 15 high) include 38.2% (¥26.95) and 50% (¥27.35). The current price near ¥28.74 aligns with the 61.8% retracement level, suggesting a potential exhaustion point. A breakdown below ¥27.74 would target ¥26.95, while a breakout above ¥29.16 could test ¥30.00.

Backtest Hypothesis

The backtest strategy, which triggers a buy on a MACD golden cross and holds for five days, yielded a 56.89% return—significantly outperforming the benchmark. With a Sharpe ratio of 1.31 and 0.00% maximum drawdown, the strategy’s risk-adjusted performance is exceptional. This aligns with the current MACD signal and RSI overbought condition, suggesting a high-probability trade for a short-to-medium-term horizon. However, caution is warranted if the RSI drops below 60 or if volume declines during subsequent rallies.