Teradyne Extends Rally With 5.20% Three-Day Gain As Technicals Signal Bullish Momentum

Teradyne (TER) shares rose 0.87% in the most recent session, extending gains for a third consecutive day and advancing 5.20% over this three-day period. The latest closing price stands at $119.85. Below is a comprehensive technical analysis integrating the requested methodologies, based on the provided historical price data.
Candlestick Theory
Recent price action reveals key technical developments. A significant bullish engulfing pattern emerged on September 18th, where the candle's body completely overwhelmed the prior day's decline, signaling strong buying pressure near $115.09 support. This was followed by continued upward momentum. Current price action faces resistance near the psychological $120 level, which aligns with the September 19th high of $120.60. Support is now established at $118.82 (September 18th close), with a secondary floor near $117.54 (September 19th low). The three successive green candles indicate bullish conviction but warrant monitoring for potential exhaustion near resistance.
Moving Average Theory
The 50-day moving average (approximately $111.50) has crossed above both the 100-day (~$108) and 200-day (~$103) averages, confirming an established intermediate-term uptrend. Price trades firmly above all three moving averages, suggesting sustained bullish momentum. Recent bounces have consistently occurred above the rising 50-DMA, reinforcing its role as dynamic support. The golden cross formation (50-DMA above 200-DMA) in late August further validates the positive bias, though proximity to current price warns that pullbacks may find initial support around the 50-DMA.
MACD & KDJ Indicators
The MACD line recently crossed above its signal line in late August and remains in positive territory, indicating bullish momentum persists. However, the histogram shows diminishing upward thrust over the past week, suggesting potential near-term consolidation. The KDJ indicator (especially the %K and %D lines) has entered overbought territory above 80 on the daily timeframe. While this can persist in strong trends, it flags the possibility of near-term overextension. A bearish crossover in KDJ would increase caution for a retracement. Divergence between price (higher highs) and KDJ’s recent lower highs requires attention as a cautionary signal.
Bollinger Bands
Price is currently trading near the upper Bollinger Band ($121), indicating extended upside relative to recent volatility. The bands expanded notably after the September 18th surge, reflecting increased volatility during the breakout. Prior to this, a period of contraction ("squeeze") occurred near the $116-$118 zone, which is characteristic of consolidation before directional moves. Sustained trading near the upper band without consolidation may prove unsustainable, increasing the probability of a reversion towards the 20-period moving average (mid-band), currently near $115.
Volume-Price Relationship
Recent gains have been supported by volume expansion, notably the 96% surge in volume on September 19th compared to September 17th, lending credibility to the breakout above $118. However, the volume profile reveals a subtle negative divergence: the September 19th close near $119.85 occurred on lower volume than the September 18th rally, suggesting some hesitancy near $120. Overall, volume remains higher on up days during the advance off the late August low ($115) compared to down days, supporting the uptrend’s foundation. Key resistance breaks (e.g., $115, $118) saw robust volume confirmation.
Relative Strength Index (RSI)
The 14-period RSI recently reached 68.50, approaching the overbought threshold of 70. This suggests waning upside momentum and heightens sensitivity to bearish reversals in the near term. While RSI below 70 isn’t inherently bearish, it does indicate the stock is becoming stretched relative to its recent price history. A decisive move above 70 would signal strong momentum but could precede a short-term pullback. Supportive trend remains intact while RSI holds above 50. Current readings suggest the risk/reward favors caution for new longs without a pullback.
Fibonacci Retracement
Applying Fibonacci levels to the significant downward swing from the March peak near $140 to the July low near $77 identifies key retracement zones. The 50% retracement level rests near $108.50, which acted as strong resistance in August before giving way to the current uptrend. The 61.8% retracement sits at $118.15. The recent close at $119.85 shows price has successfully challenged and closed above this key Fibonacci level. The next major Fibonacci resistance is the 78.6% retracement near $125.50. The breakout above $118.15 now turns this zone into potential support.
Confluence Points and Divergences
Significant confluence appears near $118, supported by: 1) the 61.8% Fibonacci retracement level; 2) last week's consolidation low; 3) the K-line and D-line in KDJ potentially acting as a magnetic pull; and 4) prior candle body supports. Conversely, bearish divergence exists between price and volume on the most recent leg higher to $120.60, and between price making higher highs and the slower pace of MACD histogram growth. The simultaneous proximity to strong historical resistance at $120, the upper Bollinger Band, and RSI nearing overbought creates a zone of heightened resistance where profit-taking or consolidation appears increasingly probable. Upside progress through this zone requires strong volume confirmation.