Spotify Jumps 6.14% In Two Days As Technicals Signal Bullish Breakout

Spotify Technology (SPOT) gained 2.99% in the most recent session, extending its advance to two consecutive days with a cumulative 6.14% appreciation. This upward momentum occurs against the backdrop of a broader technical landscape, which we analyze through multiple frameworks below.
Candlestick Theory
The price action shows a notable hammer formation on July 29 at 620.01 (close near the low of 620.01 after a 12% intraday drop), signaling potential exhaustion of selling pressure. This was followed by a bullish engulfing pattern on July 30–31, confirmed by two consecutive up days with expanding real bodies. Resistance is evident near 700–710 (July 25–28 highs), while support emerges at 635–645 (early August lows) and the critical 620 swing low. The current breakout above 668 resistance (August 1 high) suggests bullish conviction.
Moving Average Theory
The 50-day moving average (~650) crossed below the 100-day MA (~670) in mid-July, reflecting short-term bearish pressure. However, the current price (686.74) has reclaimed both the 50-day and 100-day MAs, with the 200-day MA (~590) ascending steadily. This realignment above key averages signals rejuvenated intermediate-term momentum. A golden cross (50-day above 100-day) would solidify bullish control, while failure to hold 670 may invite sellers.
MACD & KDJ Indicators
MACD exhibits a bullish crossover with histogram bars expanding positively, indicating strengthening upward momentum. KDJ shows the %K line (current: 88) crossing above %D (82) in overbought territory (>80), typically suggesting near-term continuation but warning of overheating. No divergence exists versus price. However, the overbought KDJ reading warrants caution, as reversals often follow such extremes during counter-trend rallies.
Bollinger Bands
Volatility expanded sharply during the late July sell-off, with the price touching the lower band (then near 620). Recent contraction of the bands (width narrowing from 70 to 50 points) indicates decreasing volatility, often preceding directional moves. The current price trades near the upper band (~695), supporting the breakout thesis. A sustained move above the upper band would signal strength, but mean-reversion risks increase at this extreme.
Volume-Price Relationship
The July 29 sell-off saw capitulation volume (11.5M shares), validating the 620 low. Subsequent rallies have featured higher volume on up days (August 4: 3.76M shares; August 7: 2.44M shares) versus lighter activity during pullbacks (August 5: 2.14M). This volume profile confirms accumulation during recoveries and suggests institutional participation in the rebound. The absence of volume divergence supports sustainability.
Relative Strength Index
The 14-day RSI (current: 68) is approaching overbought territory (>70) but not yet extreme. This aligns with strong momentum but highlights potential near-term exhaustion risks. Historically, RSI readings above 70 in July preceded the drop to 620. Although not diverging from price, traders should monitor for resistance near 700 coinciding with RSI >75, which could trigger profit-taking.
Fibonacci Retracement
Applying Fibonacci to the recent downswing (June 27 high: 785 → July 29 low: 620) shows the 38.2% retracement at 683. The price has decisively breached this level, targeting the 50% level (702.5). The 61.8% resistance resides at 722. This structure aligns with the key 700–710 resistance zone, creating a confluence area where sellers may emerge. Upside continuation above 702.5 would open the path to 722.
Confluence and Divergence Observations
Notable confluence exists between the 38.2% Fibonacci break (683), volume-backed breakout, and MACD bullish crossover, reinforcing 668–670 as a new support zone. KDJ and RSI show no bearish divergence but concur on overbought risks near 700 resistance. The Bollinger Band width contraction and upper band proximity support continuation if volatility expands upward. Key resistance confluence occurs at 700 (psychological level + 50% Fibonacci + July high), where multiple technical factors may challenge further gains without consolidation.