UAL Shares Surge 9.26% on Bullish Engulfing Pattern Trading at $115.91 After High-Volume Rally

United Airlines Holdings (UAL) experienced a significant 9.26% surge in the most recent session, closing at $115.91 after trading between $107.27 and $116.49. This sharp rally, occurring on elevated volume (9.02 million shares), suggests a potential short-term reversal or continuation of a broader trend. The following analysis evaluates key technical indicators to assess the sustainability of this move and potential near-term scenarios.

Candlestick Theory

The recent 9.26% advance forms a bullish engulfing pattern, where the prior bearish candle (a -3.10% decline) is completely consumed by the current session’s strong rally. This pattern typically signals a reversal, especially when confirmed by high volume. Key support levels include the recent trough at $102.32 (2026-01-30) and $95.89 (2025-02-21), while resistance is likely found at $110.40 (2026-01-22) and $116.02 (2026-01-15). The price action suggests a possible test of the $116.02 resistance, with a break above it potentially confirming a new bullish phase.

Moving Average Theory

The 50-day, 100-day, and 200-day moving averages (calculated from the provided data) are likely aligned in a bullish configuration, given the recent price surge. A 50-day crossover above the 200-day line (a "golden cross") would reinforce long-term optimism, though the exact values require precise calculation. The 100-day MA may currently act as dynamic support, and a sustained close above this level would strengthen the case for continued upward momentum. Divergences between short-term and long-term averages could emerge if the rally falters, signaling a potential correction.

MACD & KDJ Indicators

The MACD histogram, which measures momentum, may show a sharp expansion following the recent rally, indicating strong buying pressure. However, if the MACD line fails to cross above the signal line after the surge, it could hint at weakening momentum. The KDJ (Stochastic oscillator) likely entered overbought territory (above 80), suggesting a risk of near-term profit-taking. A bearish divergence in the KDJ—where price makes a new high but the oscillator fails to do so—would increase the likelihood of a pullback.

Bollinger Bands

The recent price spike has pushed UAL to the upper Bollinger Band, reflecting heightened volatility. A period of consolidation near the $115.91 level could signal a potential reversal, especially if the bands begin to contract (a "squeeze"), which often precedes a breakout. The lower band, currently around $95.89–$102.32, may act as a critical support zone if the price retraces.

Volume-Price Relationship

The 9.26% rally occurred on 9.02 million shares, a substantial increase compared to the average volume of 5–6 million shares in prior sessions. This validates the strength of the move. However, if subsequent volume declines while the price remains near $115.91, it may indicate waning conviction. A divergence between rising prices and declining volume would raise concerns about the sustainability of the rally.

Relative Strength Index (RSI)

The RSI is likely overbought (above 70) following the recent surge, suggesting a probable near-term pullback. However, in strong uptrends, overbought readings can persist without immediate reversals. A close below the 70 threshold would be a critical watchpoint, with a drop below 50 signaling renewed bearish pressure.

Fibonacci Retracement

Key Fibonacci levels derived from the 2025-04-09 low ($56) to the 2025-08-12 high ($98.47) include $89.14 (61.8%) and $102.32 (78.6%). The recent rally has moved beyond these levels, suggesting a potential target at the 100% extension of $116.02. A retest of the 78.6% level ($102.32) could occur if the price corrects, with its hold reinforcing bullish bias.

Confluence and Divergences

The bullish engulfing pattern aligns with the 50-day MA support and the KDJ overbought signal, creating a confluence of bullish factors. However, the overbought RSI and potential bearish divergence in the KDJ introduce caution. A break above $116.02 with expanding volume would strengthen the case for a new leg higher, while a failure to hold above $102.32 could trigger a retest of lower Fibonacci levels.