STMicroelectronics Posts 4.13% Surge as Bullish Hammer and Golden Cross Signal Rebound

Candlestick Theory

STMicroelectronics (STM) exhibits a recent bullish reversal on 2025-09-15, marked by a 4.13% surge to $26.98, forming a potential "Hammer" pattern amid prior bearish momentum. Key support levels are identified at $25.65 (2025-08-15) and $24.77 (2025-08-11), while resistance clusters at $27.52 (2025-08-22) and $26.505 (2025-09-04). The price has tested the $26.45 level (2025-09-04) twice, suggesting a short-term pivot. A breakdown below $25.65 could trigger further declines toward $24.77, whereas a sustained move above $27.52 may validate a broader bullish trend.

Moving Average Theory

Short-term momentum is supported by the 50-day MA (estimated ~$26.50) crossing above the 100-day MA (~$26.00) and 200-day MA (~$25.70), forming a "Golden Cross" that signals bullish bias. The current price of $26.98 sits above all three moving averages, reinforcing the uptrend. However, the 50-day MA is approaching the 100-day MA at $26.50, and a potential "Death Cross" could emerge if the 50-day MA dips below the 200-day MA during a pullback. The 200-day MA acts as a critical psychological floor; a close below $25.70 would invalidate the medium-term bullish case.

MACD & KDJ Indicators

The MACD histogram shows divergence between price and momentum, with the line crossing above the signal line on 2025-09-15, confirming a bullish crossover. However, the RSI (calculated at ~60) approaches overbought territory, suggesting caution. The KDJ stochastic oscillator indicates overbought conditions (K=82, D=75), with K diverging from D, hinting at potential exhaustion. This confluence of MACD strength and KDJ overbought levels implies a possible short-term pullback to the 50-day MA at $26.50.

Bollinger Bands

Volatility has expanded recently, with the 20-day Bollinger Bands widening from a narrow range in early September. The current price of $26.98 sits near the upper band, indicating overbought conditions. A retest of the lower band (~$25.80) could occur if volatility contracts, aligning with Fibonacci retracement levels. The 20-day standard deviation is elevated (~$0.75), suggesting heightened risk of a mean reversion.

Volume-Price Relationship

Trading volume surged to 8.64 million shares on 2025-09-15, validating the bullish breakout. However, volume has been inconsistent during recent rallies, with a 4.82 million share volume on 2025-09-12 despite a 0.92% decline. This mixed volume pattern suggests uneven conviction in the current trend. A sustained increase in volume above 10 million shares during upward moves would strengthen the case for continuation.

Relative Strength Index (RSI)

The 14-day RSI is at 60, hovering near overbought territory. While not yet exceeding 70, the rapid ascent from 40 to 60 in three sessions indicates aggressive buying. A close above 70 would confirm overbought conditions, historically increasing the probability of a pullback. Conversely, a drop below 50 would signal weakening momentum, potentially triggering a test of the $25.65 support.

Fibonacci Retracement

Key Fibonacci levels derived from the 2025-08-22 high ($27.52) and 2025-08-11 low ($24.77) include 23.6% ($26.95), 38.2% ($26.50), and 50% ($26.15). The current price is near the 23.6% level, suggesting a possible continuation of the uptrend if the 38.2% level at $26.50 holds. A breakdown below the 50% level would target $25.65, aligning with the candlestick support.

Backtest Hypothesis

The backtest strategy of buying STM when RSI dips below 30 and selling above 60 demonstrated a 51.86% return from 2022 to 2025, outperforming the 42.95% benchmark. However, the 26.87% volatility and 0% maximum drawdown suggest the strategy’s effectiveness hinges on precise RSI thresholds. Given STM’s current RSI near 60, the strategy would trigger a sell signal, despite the price remaining above key moving averages. This divergence highlights the need for supplementary filters, such as volume validation or Fibonacci levels, to avoid premature exits during strong trends.