Stellantis Surges 5.08% on Bullish Candlestick and Golden Cross as Volume Jumps 50%

Candlestick Theory

Stellantis (STLA) has experienced a 5.08% surge in the most recent session, forming a bullish candlestick with a strong close near the upper shadow. This suggests short-term buying momentum. Key support levels are identified at $9.42 (prior consolidation zone) and $8.96 (2025-07-06 low), while resistance aligns with the 2025-08-22 high of $10.19. A break above $10.19 could trigger a retest of the 2025-07-23 high at $10.39, but bearish divergence in the KDJ oscillator (discussed later) may challenge this continuation.

Moving Average Theory

Short-term momentum is confirmed by the 50-day MA ($10.25) crossing above the 100-day ($9.95) and 200-day ($9.75) averages, forming a "golden cross" structure. The price currently sits above all three, reinforcing a bullish trend. However, the 200-day MA acts as a dynamic support, and a close below $9.75 would invalidate the uptrend. The 50-day MA at $10.25 could serve as a near-term target for further gains.

MACD & KDJ Indicators

The MACD histogram is expanding positively, with the fast line ($0.30) above the signal line ($0.15), indicating strengthening bullish momentum. The KDJ oscillator, however, shows overbought conditions (K at 85, D at 75), suggesting potential exhaustion. This creates a divergence: while momentum is strong, the overbought reading may precede a pullback. The RSI (discussed next) corroborates this, highlighting a confluence of caution.

Bollinger Bands

Bollinger Bands have widened significantly, reflecting heightened volatility. The price is currently near the upper band at $10.19, a classic sign of overextension in a strong trend. A retest of the middle band ($9.95) could occur if the upper band fails to hold, but the bands’ expansion suggests the trend may persist for a few more sessions.

Volume-Price Relationship

Trading volume surged to 16.26 million shares on the 5.08% rally, a 50% increase from the prior session. This volume surge validates the price action’s strength, indicating institutional participation. However, if volume tapers off during a follow-through rally, it may signal waning momentum. The volume profile also highlights a key accumulation zone between $9.64 and $9.94, which supports the current breakout.

Relative Strength Index (RSI)

The RSI stands at 72, entering overbought territory. While this typically warns of a potential correction, the RSI’s 14-day average ($68) remains above 50, suggesting the uptrend is intact. A drop below 60 would indicate weakening momentum, but a close above 75 could extend the rally. The RSI’s divergence with the KDJ oscillator (overbought but not yet peaking) implies caution for short-term traders.

Fibonacci Retracement

Applying Fibonacci levels to the 2025-07-06 low ($8.82) and 2025-08-22 high ($10.19), key retracement levels are:

- 23.6%: $9.91

- 38.2%: $9.72

- 50%: $9.50

The 38.2% level at $9.72 aligns with the 2025-08-20 close and may act as a critical support. A breakdown below this would target the 50% level at $9.50, challenging the current bullish bias.

Backtest Hypothesis

A backtest of a strategy selling STLA when the RSI exceeds 70 has underperformed a buy-and-hold approach, with a -27.67% excess return, a Sharpe ratio of 0.16, and a maximum drawdown of 0.00%. This suggests the strategy fails to account for the stock’s strong trend-following behavior. The confluence of bullish indicators—golden cross, expanding Bollinger Bands, and robust volume—highlights that overbought RSI signals in strong uptrends often lead to false sell-offs. Traders should instead focus on dynamic support levels and divergence in the KDJ oscillator for more reliable entry/exit points.