Spotify Soars 6.35% on Strong Technical Setup as Golden Cross and Bullish Patterns Signal Uptrend Continuation

Spotify Technology (SPOT) has experienced a robust uptrend in recent sessions, with a 3.81% gain on the most recent trading day and a cumulative 6.35% rise over five consecutive days. This sustained rally suggests strong buying pressure and momentum, potentially driven by positive market sentiment or earnings-related factors. The price action has pushed SPOT above key psychological levels, with the 734.12 level acting as a recent resistance-turned-support. The confluence of rising highs and lows indicates a strong bullish trend, though a pullback to test the 707.19 level (previous week’s close) may provide a critical support zone.

Candlestick Theory

The recent candlestick pattern features a series of tall-bodied bullish candles with minimal wicks, suggesting aggressive buying. A potential bullish engulfing pattern emerged on September 18, 2025, where the candle’s body fully engulfs the prior day’s bearish candle. This pattern, combined with a rejection at the 688.96 level earlier in the week, reinforces the 707.19–734.12 range as a key support/resistance cluster. Traders should monitor for a potential bearish reversal if SPOT closes below 707.19, which could signal a short-term correction.

Moving Average Theory

Short-term moving averages (50-day and 100-day) are positioned above the 200-day line, confirming an uptrend. The 50-day MA currently sits at approximately 695, while the 100-day MA is near 670, creating a “golden cross” scenario. The 200-day MA, around 650, acts as a long-term support. The narrowing gap between the 50-day and 100-day MAs suggests decelerating momentum, though the price remains firmly above both, indicating trend integrity. A break below the 50-day MA would raise concerns about trend sustainability.

MACD & KDJ Indicators

The MACD histogram has expanded into positive territory, reflecting growing bullish momentum, while the signal line remains above zero. This aligns with the KDJ indicator, where the %K line (75) and %D line (70) intersect in overbought territory, suggesting a potential overbought condition. However, in a strong uptrend, such levels often act as consolidation zones rather than reversal signals. Divergence between the KDJ lines and price could foreshadow a pullback, but current readings support continuation bias.

Bollinger Bands

SPOT’s price has tested the upper Bollinger Band (745) repeatedly, with the bands widening to reflect heightened volatility. The 20-period standard deviation has expanded to 25, indicating increased dispersion around the moving average. A sustained break above the upper band may trigger a parabolic move, but a close below the middle band (710) could trigger a retest of the lower band (675), where a bounce might occur.

Volume-Price Relationship

Trading volume has surged during the recent rally, with the September 18 session recording 2.5 million shares traded. This volume validates the price strength, as higher-than-average volume on up days suggests institutional buying. However, if volume tapers while the price continues to rise, it may signal waning conviction. Conversely, a spike in volume on a down day could confirm a breakdown below key support.

Relative Strength Index (RSI)

The 14-day RSI has reached 72, entering overbought territory. While this typically warns of a potential correction, SPOT’s RSI has historically lingered above 70 during strong trends. A drop below 60 would indicate weakening momentum, but a sustained reading above 65 would suggest the uptrend remains intact. Traders should watch for a “bullish divergence” (rising price with falling RSI) as a cautionary sign.

Fibonacci Retracement

Applying Fibonacci levels from the March 2025 low (548.55) to the September 2025 high (745), the 38.2% retracement level at 660 and the 50% level at 646.77 act as potential support zones. The price’s current position above 707.19 suggests a shallow retracement, with a break below 660 potentially targeting the 620–630 range.

Backtest Hypothesis

A backtested strategy relying solely on RSI overbought (>70) and oversold (<30) signals from 2022 to 2025 resulted in a loss, as highlighted by the February 2022 peak RSI (82) and subsequent May 2022 sell-off. This outcome underscores the limitations of single-indicator trading in trending markets. Integrating confluence with moving averages and volume patterns could enhance reliability. For instance, a modified strategy might trigger long entries when RSI >70 coincides with a golden cross and expanding volume, while exits occur at RSI <50 with bearish divergence. Such a multi-criteria approach aligns with SPOT’s current technical setup, balancing momentum and trend-following signals.