Thermo Fisher (TMO) Climbs 3.62% as Technical Analysis Points to Uptrend Resumption Following 9.42% Rally and Pullback

Thermo Fisher (TMO) has seen a 0.12% rise over two consecutive sessions, with a cumulative 3.62% gain in the past two days, indicating short-term bullish momentum. The recent price action suggests a potential consolidation phase following a sharp 9.42% rally on October 1, 2025, followed by a pullback on October 2, 2025 (-1.09%). This pattern may signal a flag or rectangle formation, with key support at the September 30 low ($460) and resistance near the October 3 high ($545.44).

Candlestick Theory

The recent price action reveals a series of higher highs and higher lows, suggesting an uptrend. However, the October 2 pullback to $524.96 forms a potential bearish engulfing pattern, hinting at temporary exhaustion. Key support levels include the 38.2% Fibonacci retracement at $508.6 and the 61.8% level at $475.6. Resistance is clustered around $545.44 and $530.73 (October 1 high). A break above $545.44 with increasing volume could validate a continuation of the uptrend, while a close below $508.6 may trigger a deeper correction.

Moving Average Theory

The 50-day moving average (approximately $495–$500) and 200-day MA (around $485–$490) remain well below the current price of $543.95, indicating a bullish bias. The 50-day MA crossing above the 200-day MA earlier in the year (e.g., July 2025) confirmed a long-term uptrend. However, the 100-day MA (~$505) is approaching the 50-day MA, suggesting potential narrowing of the moving average spread, which may precede a trend reversal if the 50-day MA crosses below the 100-day MA.

MACD & KDJ Indicators

The MACD histogram has been positive for the past three weeks, with the MACD line crossing above the signal line in early September, reinforcing the uptrend. However, the stochastic oscillator (KDJ) shows %K (~65) and %D (~55) in neutral territory, with no immediate overbought (RSI >70) or oversold (RSI <30) signals. A divergence between the MACD and price action (e.g., price highs outpacing MACD highs) could foreshadow a correction.

Bollinger Bands

The price is currently near the upper Bollinger Band, reflecting elevated volatility. The band width has expanded following the October 1 surge, suggesting a potential breakout. A sustained move above the upper band ($545.44) with increasing volume may confirm a bullish continuation, while a drop below the lower band ($500–$505) could indicate a bearish phase.

Volume-Price Relationship

Trading volume surged to $3.17 billion on October 1, 2025, coinciding with the 9.42% gain, indicating strong institutional buying. However, volume has since declined to ~$1.4 billion on recent up days, suggesting weakening momentum. A divergence between volume and price (e.g., rising prices with shrinking volume) may signal a lack of conviction in the uptrend.

Relative Strength Index (RSI)

The RSI (~55–60) remains in neutral territory, with no overbought signals as of yet. A move above 70 would trigger caution, while a drop below 30 could indicate oversold conditions. The RSI’s alignment with the MACD suggests the uptrend is still intact, but a bearish crossover (RSI < signal line) may precede a pullback.

Fibonacci Retracement

Key Fibonacci levels from the recent low ($460 on September 30) to the high ($545.44 on October 3) include 38.2% at $508.6, 50% at $502.7, and 61.8% at $496.8. The current price is approaching the 50% retracement level, which may act as a critical support/resistance zone. A break above $508.6 could target the 61.8% level ($527.5), while a failure to hold $502.7 may lead to a test of the 38.2% level.

Backtest Hypothesis

The proposed RSI-based strategy—buying when RSI exceeds 70 and selling when it crosses below 70—has historically underperformed for TMO, delivering a 4.92% return from 2022 to 2025 versus a 40.27% benchmark return. The strategy’s low Sharpe ratio (0.27) and negative excess return (-35.35%) highlight inefficiency in capturing market gains. This underperformance may stem from TMO’s fundamental resilience (e.g., Q2 2025 EPS beat, undervaluation at 21x forward P/E) conflicting with the RSI’s mechanical signals. A long-term hold, paired with sector ETFs like XLV (healthcare), may better align with TMO’s strong operational and market position.