United Airlines Shares Rally 6.19% as Bullish Candlestick Patterns and Golden Cross Signal Strong Buy Momentum

United Airlines Holdings (UAL) has surged 3.71% in the most recent session, extending its two-day rally to a 6.19% gain. This sharp upward movement suggests strong buying pressure, particularly evident in the candlestick patterns. A long white candle with minimal upper shadow indicates a decisive reversal from prior bearish sentiment. Key support levels can be identified at the recent low of $92.84 (2025-11-24) and $90.05 (2025-11-20), while resistance is likely near $95.62 (current close) and the 200-day moving average. The price action hints at a potential breakout above the $95.62 level, which could trigger further bullish momentum if accompanied by sustained volume.

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Candlestick Theory

The recent bullish engulfing pattern and a strong piercing line formation confirm a short-term reversal from bearish to bullish bias. The $92.84 support level has held twice, suggesting a psychological floor for the stock. However, the absence of a confirmed higher high above $95.62 indicates that the rally may still be in its early phase. Traders should monitor for a break above $95.97 (2025-11-21 high) to validate a continuation of the uptrend.

Moving Average Theory

The 50-day moving average (approximately $94.50) is currently above the 200-day MA ($93.00), forming a golden cross, which signals a long-term bullish trend. The 100-day MA ($94.00) acts as a dynamic support. Short-term momentum is reinforced by the 50-day MA crossing above the 100-day MA, suggesting that the stock is in an accelerating uptrend. However, a divergence between the 200-day MA and price action could indicate weakening momentum if the 200-day MA fails to keep pace with the shorter-term averages.

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MACD & KDJ Indicators

The MACD histogram has shown a positive divergence, with the MACD line crossing above the signal line in the last week, confirming a bullish crossover. The KDJ indicator (stochastic oscillator) is currently in overbought territory, with %K at 85 and %D at 80, suggesting a potential pullback. However, the KDJ's slow stochastic reading (75/70) indicates that the overbought condition may persist if the uptrend continues. A crossover of %K below %D could signal a near-term correction.

Bollinger Bands

The stock is trading near the upper band of the Bollinger Bands, with a width of 1.2 standard deviations, reflecting high volatility. The recent expansion of the bands aligns with the sharp price increase, but the price’s proximity to the upper band suggests overbought conditions. A retest of the $92.84 support level (lower band) could occur if the bands contract, which may happen after a period of consolidation.

Volume-Price Relationship

Trading volume has surged to 8.5 million shares in the most recent session, a 15% increase from the prior day, validating the price rally. The volume profile shows a positive divergence, as volume has increased with each higher close. However, if volume begins to wane while the price continues to rise, it could signal a loss of conviction among buyers.

Relative Strength Index (RSI)

The 14-day RSI is currently at 68, approaching overbought territory. While not yet above 70, the RSI’s rapid ascent suggests exhaustion in the short term. A breach above 70 would confirm overbought conditions, but the RSI’s alignment with the MACD golden cross indicates that the uptrend may still have room to run. Caution is warranted if the RSI fails to break above 70 and instead forms a bearish divergence.

Fibonacci Retracement

Applying Fibonacci levels to the recent swing low ($90.05 on 2025-11-20) and swing high ($95.97 on 2025-11-21), key retracement levels are at 38.2% ($93.95) and 61.8% ($92.30). The current price is testing the 38.2% level, which could act as a pivot point. A breakout above $95.97 would target the 78.6% level ($97.20), while a breakdown below $92.30 would invalidate the bullish case.

Backtest Hypothesis

The backtest strategy of buying on a MACD golden cross and selling on RSI overbought conditions has historically yielded gains for UAL, particularly during the 2022-2023 period. The current MACD golden cross (50-day above 200-day MA) aligns with this strategy, suggesting a potential entry point. However, the RSI nearing 68 indicates that the stock is approaching overbought territory, which could trigger a sell signal if it breaches 70. While the historical performance of this strategy was robust, recent volatility and the stock’s proximity to key resistance levels suggest that the strategy may require adjustments, such as incorporating Fibonacci retracement levels or tighter stop-loss thresholds, to account for the heightened risk of a pullback.

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