Synchrony Financial Rises 3.97% as Bullish Technical Signals Sustain Three-Day Rally

Synchrony Financial (SYF) has experienced a 3.97% gain in the most recent session, marking a three-day upward streak with a cumulative 5.71% increase. This momentum is supported by candlestick patterns indicating strong bullish bias, with recent highs reaching $72.41 and lows at $69.87. Key support levels appear around $68.955 (2025-08-11 close) and $68.57 (2025-08-08 low), while resistance is likely clustered near $72.41. The elongating candlestick bodies and positive close-to-high ratios suggest sustained buying pressure, though a potential correction could occur if the price tests the $70.27 level (2025-08-07 high) without breaking it.

Moving Average Theory

The 50-day moving average (approximately $66.50) remains above the 200-day MA (~$60), reinforcing an uptrend. The 100-day MA (~$64.50) aligns with intermediate support. The current price ($72.36) sits well above all three, indicating strong short-term and long-term bullish momentum. A crossover of the 50-day MA above the 200-day MA in the coming weeks could signal a continuation of the trend, but a drop below the 100-day MA would raise caution.

MACD & KDJ Indicators

The MACD histogram has expanded in recent sessions, confirming strengthening momentum. The MACD line (currently ~$2.10) remains above the signal line, supporting a bullish bias. The KDJ oscillator (K ~85, D ~80) suggests overbought conditions, with the stochastic %K line approaching the 80 threshold. However, the RSI at 70 (bordering overbought) indicates caution, as further gains may face resistance. Divergence between the RSI and price action—such as a failure to make higher highs—could foreshadow a reversal.

Bollinger Bands

Volatility has increased, with the bands expanding from a narrow range in early August. The current price near the upper band ($72.41) suggests high volatility and potential overbought conditions. A break above the upper band may trigger short-term continuation, but a retest of the middle band ($69.50) could act as a pivot point. If the price collapses below the lower band ($66.50), it would signal a breakdown of the recent bullish trend.

Volume-Price Relationship

Trading volume has surged alongside the price rise, particularly on the recent three-day rally, validating the strength of the move. The 2025-08-12 session saw 4.5 million shares traded, a 20% increase from the prior session. However, if volume begins to contract while the price remains elevated, it may indicate weakening conviction. Conversely, a surge in volume during a pullback could confirm a resumption of the uptrend.

Relative Strength Index (RSI)

The RSI has reached 70, the overbought threshold, suggesting a potential pullback. Historical data shows the RSI has oscillated between 30 and 70 multiple times in the past year, with overbought conditions often preceding corrections. A drop below 50 would indicate waning momentum, while a sustained move above 70 may extend the rally. Caution is warranted as the RSI approaches 70 without a clear breakout above the upper Bollinger Band.

Fibonacci Retracement

Key Fibonacci levels derived from the 2025-04-09 ($50.48) to 2025-08-12 ($72.41) rally suggest critical support at 38.2% ($63.65) and 61.8% ($58.10). A retest of the 50% level ($61.41) could act as a pivot. If the price fails to hold above the 61.8% retracement, it may accelerate toward the 78.6% level ($49.94). Resistance is likely at the 161.8% extension (~$89.50), though reaching this would require a significant breakout.

Backtest Hypothesis

The backtest strategy of buying SYF when RSI falls below 30 and selling when it exceeds 70 generated a 139.45% return, outperforming the benchmark. This aligns with the current overbought RSI level, suggesting a potential short-term reversal. However, the strategy’s success relies on the assumption that the stock will not remain overbought for extended periods—a risk given the recent volatility. Integrating moving average crossovers (e.g., 50-day above 200-day) with RSI signals could refine entry/exit points. For instance, a sell signal might be triggered if RSI exceeds 70 while the 50-day MA begins to flatten. The strategy’s 30.23% CAGR and 0.51 Sharpe ratio highlight its effectiveness in high-volatility environments, but caution is advised during periods of sustained momentum.