TotalEnergies Surges 5.37% on Three-Day Rally as Technical Indicators Signal Bullish Reversal

TotalEnergies (TTE) has surged 3.62% on the most recent session, marking a three-day rally with a 5.37% cumulative gain. The price action reflects a bullish reversal from recent consolidation, with the high of 60.71 on October 15 forming a potential resistance level. Key support levels emerge at 57.44 (October 14 low) and 58.36 (October 14 close), while resistance is clustered near 58.67–59.71. A bullish engulfing pattern is evident as the price retests prior resistance (58.67–59.71) and closes above it, suggesting momentum is shifting to the upside.

Candlestick Theory

The recent three-day rally forms a "three white soldiers" pattern, a classic bullish reversal signal. The October 15 session’s close near the high of 60.47 indicates strong conviction in the uptrend. Key support levels at 57.44 and 58.36 (October 14) align with prior lows, while resistance at 60.71 (October 15 high) and 61.72 (September 26 high) could trigger further buying if breached. A breakdown below 58.36 would invalidate the bullish bias.

Moving Average Theory

The 50-day moving average (approximately 59.50) is above the 200-day MA (around 57.50), suggesting a short-term bullish bias. The 100-day MA (58.00) acts as a dynamic support. Price is currently above the 50-day MA, reinforcing the uptrend. However, the long-term trend remains neutral, as the 200-day MA lags behind. A close below 58.00 would signal weakening momentum.

MACD & KDJ Indicators

The MACD histogram has turned positive, with the line crossing above the signal line, indicating a bullish crossover. The KDJ oscillator (stochastic) shows overbought conditions, with the K line near 80, suggesting potential exhaustion in the rally. A divergence between the KDJ and price action could signal a near-term correction.

Bollinger Bands

The price of 60.47 is near the upper Bollinger Band (assuming a 20-day MA of 59.50 and volatility of ±1.50), reflecting high volatility. The bands have widened since early October, aligning with increased trading volume. A pullback to the mid-band (59.50) would likely find support, while a break above the upper band could extend the rally.

Volume-Price Relationship

Trading volume has surged on the three-day rally, with the October 15 session’s volume (2.3M shares) being the highest in over a month. This supports the sustainability of the uptrend. However, declining volume on subsequent bullish sessions could indicate waning conviction.

Relative Strength Index (RSI)

The RSI is approaching overbought territory (>70), suggesting short-term overextension. While this often precedes a pullback, the recent volume surge implies buyers are still active. A move above 70 without a volume spike could signal a false breakout.

Fibonacci Retracement

Key Fibonacci levels between the September 26 high (63.15) and October 14 low (57.44) include 59.45 (61.8% retracement) and 58.36 (78.6% retracement). The price has just crossed the 61.8% level, suggesting a potential continuation of the uptrend if buyers defend 58.36.

Backtest Hypothesis

A backtest of a strategy buying TotalEnergies on MACD Golden Cross signals (12/26 EMA crossover) and holding for 10 days from 2022 to 2025 yields underwhelming results. The strategy returned 8.16% versus the S&P 500’s 38.19%, with a Sharpe ratio of 0.14 and 14.77% volatility. This poor performance aligns with the energy sector’s sensitivity to macroeconomic factors (e.g., oil prices, geopolitical risks) and the current bearish MACD reading (-0.19). The confluence of overbought RSI and bearish MACD divergence suggests caution, as the strategy historically struggles in high-volatility environments.

The analysis highlights a strong short-term bullish setup from candlestick patterns and moving averages, but the overbought RSI and bearish MACD divergence create a probabilistic risk of a near-term correction. While Fibonacci levels and volume support the continuation of the uptrend, the backtest results caution against relying solely on technical signals in this volatile sector.