Ubiquiti Rallies 12% In 3 Days As Technicals Signal Bullish Breakout

Ubiquiti (UI) surged 3.01% in the latest session, extending its winning streak to three consecutive days with a cumulative 12.13% gain, reflecting strong bullish momentum as the stock closed near the session high at $460.40.
Candlestick Theory
Recent candlestick patterns for Ubiquiti reveal a robust bullish reversal. The three-day rally formed three consecutive white candles with higher highs/lows, culminating in a long-bodied candle closing near $460.40. This confirms a breakout above the key resistance at $451.42 (prior swing high from July 17). Immediate support is established at $444.00 (latest session low), with stronger support at $421.97 (July 16 close). The absence of upper wicks in the rally suggests sustained buying pressure, though near-term consolidation may occur given the 12% surge.
Moving Average Theory
Ubiquiti's moving averages confirm a bullish trend across timeframes. The current price ($460.40) trades above all key SMAs: the 50-day ($403.21), 100-day ($376.44), and 200-day ($340.18). The 50-day SMA crossed above the 100-day SMA in early June, while the 100-day maintains distance above the 200-day. This alignment signals strong intermediate and long-term uptrends. Notably, the price remains 14% above the 200-day SMA, indicating extended momentum that may warrant caution.
MACD & KDJ Indicators
The MACD histogram shows accelerating bullish momentum, with the MACD line (13.8) decisively above the signal line (11.2) and both rising. Meanwhile, the KDJ indicator entered overbought territory (K: 87, D: 82, J: 97), reflecting extreme near-term strength. While the MACD supports continuation, the KDJ’s overbought reading suggests potential short-term pullback risk. Divergence is absent between the indicators, aligning on bullish bias but flagging overextension.
Bollinger Bands
Ubiquiti’s price touched the upper Bollinger Band ($459.20) after breaking from a volatility contraction phase (bandwidth narrowed 20% in late June). The expansion signals renewed momentum, with the price consistently trading above the 20-period SMA ($441.80). Closure above the upper band often precedes consolidation; a retreat to the midline ($441.80) could offer buying opportunities if supported by volume.
Volume-Price Relationship
Volume trends validate the recent breakout. The three-day rally occurred on ascending volume (66,929 → 110,478 → 97,556 shares), confirming bullish conviction. Notably, the July 17 surge (+5.92%) recorded the highest volume in three weeks, exceeding the 10-day average by 25%. However, the latest session’s slightly lower volume versus the prior day may signal near-term exhaustion, requiring monitoring for follow-through participation.
Relative Strength Index (RSI)
The 14-day RSI reads 73, crossing into overbought territory (>70) for the first time since February. While this indicates strong momentum, its warning nature implies heightened reversal probability. Historically, Ubiquiti’s RSI peaks above 75 precede 5-8% corrections (observed in February and May 2025). Confluence with KDJ overbought conditions reinforces near-term caution despite the bullish structure.
Fibonacci Retracement
Applying Fibonacci retracement to the March-July 2025 swing (low: $319.08 on March 14; high: $460.40 on July 18), key retracement levels are: 38.2% ($409.60), 50% ($389.74), and 61.8% ($369.88). The current price exceeds the 78.6% extension level ($445.30), indicating overextension. Given RSI/KDJ warnings, a pullback toward $421.97 (23.6% retracement) or $409.60 (38.2%) aligns with historical support. Confluence exists near $421.97, matching the July 16 breakout level and volume-supported resistance-turned-support.
Conclusion
Ubiquiti exhibits potent bullish momentum confirmed by moving averages, MACD, and volume-backed breakouts. However, confluence warnings emerge: RSI and KDJ overbought readings, combined with Fibonacci overextension and Bollinger Band proximity, suggest heightened near-term pullback probability. A retracement toward $421-$410 would offer healthier entry points, where 38.2% Fibonacci support aligns with moving averages and prior resistance. Traders should monitor volume on pullbacks; sustained trade above $451 invalidates immediate bearish divergences.