Thermo Fisher Shares Surge 3.25% on Four-Day Rally, Gaining 6.34% as Technical Indicators Signal Potential Bullish Continuation

Thermo Fisher (TMO) has experienced a 3.25% surge on the most recent session, extending a four-day winning streak with a cumulative gain of 6.34%. The price action suggests a potential bullish continuation, supported by a series of higher highs and higher lows. Key support levels appear to be consolidating around the 460.91–462.39 range, while resistance is forming near the 477.41–484.96 zone. A breakout above the 484.96 level could trigger a retest of the July 31 high of 483.87, while a pullback to the 460.91 support may indicate a temporary consolidation phase.

Candlestick Theory

The recent four-day rally exhibits a bullish continuation pattern, characterized by strong closing prices near the upper shadows of the candles. A potential "bullish engulfing" pattern is emerging as the latest candle closes significantly above the prior bearish session. Key psychological levels at 460.91 and 477.41 align with prior swing lows and highs, respectively. A breakdown below the 460.91 level could invalidate the current bullish bias, while a sustained close above 484.96 may signal a resumption of the longer-term uptrend.

Moving Average Theory

The 50-day moving average (approximately 460–470) currently sits below the 200-day line (~455–465), indicating a bearish crossover in the intermediate term. However, the 50-day line is rapidly approaching the 200-day line, suggesting a potential "death cross" reversal risk. The 100-day MA (~470) provides a dynamic support/resistance layer. A close above 484.96 would see the 200-day MA shift into a bullish alignment, but the current short-term momentum remains fragile given the bearish 50/200 crossover.

MACD & KDJ Indicators

The MACD histogram has shown a narrowing divergence as the 12-day and 26-day lines converge toward a potential bearish crossover. The KDJ stochastic oscillator is currently overbought (K=85, D=75), signaling caution despite the recent strength. A bearish crossover in the KDJ would likely precede a pullback to the 460.91–462.39 range. The MACD's failure to generate higher highs despite the price action suggests weakening momentum, increasing the probability of a near-term correction.

Bollinger Bands

Volatility has expanded significantly, with the upper band reaching 483.87 and the lower band at 451.44. The current price of 477.41 is positioned closer to the upper band, indicating stretched conditions. A contraction in band width over the next few sessions may signal a consolidation phase, while a breakout above the upper band would require a close above 484.96. The lower band remains a critical support level, and a breach below 451.44 could trigger a retest of the April 2024 low (~410).

Volume-Price Relationship

Trading volume has increased in tandem with the recent price surge, validating the bullish momentum. However, the volume on the most recent session (2.1M shares) is lower than the July 23–24 spikes (6.2M–8.9M), suggesting potential exhaustion in the buying pressure. A divergence between volume and price could emerge if the next rally occurs on declining volume, which would weaken the case for a sustained uptrend.

Relative Strength Index (RSI)

The 14-day RSI is currently at ~72, entering overbought territory. While this typically signals a potential pullback, the RSI has remained above 70 for extended periods during the 2024–2025 rally. A bearish crossover below 70 would likely coincide with a test of the 460.91–462.39 support zone. Caution is warranted as overbought conditions in a strong uptrend can persist for weeks, but the recent divergence in MACD and KDJ increases the likelihood of a near-term correction.

Fibonacci Retracement

Key Fibonacci levels between the April 2024 low (410) and the July 2025 high (484.96) are critical. The 38.2% retracement level (~447) and 50% level (~447.5) have already been tested multiple times. A retest of the 61.8% level (~468) would align with the current price action, suggesting a potential consolidation phase before a resumption of the longer-term uptrend.

Backtest Hypothesis

The backtest strategy of buying TMO on MACD and KDJ golden crosses and holding for 10 days yielded a 6.23% return, significantly underperforming the 68.88% benchmark. The low CAGR (2.24%) and near-zero maximum drawdown suggest a risk-averse approach that failed to capitalize on broader market trends. This underperformance may stem from the strategy’s reliance on short-term momentum indicators in a low-volatility environment, where longer-term trends (e.g., the 2024–2025 rally) dominate. Integrating Fibonacci retracement levels or volume-based filters could improve the strategy by aligning trades with higher-probability setups during consolidation phases.