Veralto (VLTO) Soars 5.93% on Bullish Engulfing Pattern and Golden Crossover as Support Holds at $97.46–$98.14

Veralto (VLTO) closed the most recent session with a 5.93% gain, surging from a low of $97.46 to $103.96, marking a sharp reversal from prior consolidation. This move suggests strong buying pressure, particularly as the price closed near the upper shadow of a long bullish candle, indicating potential exhaustion of sellers at key support levels. Key support appears to be forming around $97.46–$98.14, while resistance has shifted to $103.96–$104.33, reflecting a recent breakout from a descending triangle pattern.
Candlestick Theory
The recent session’s candlestick forms a strong bullish engulfing pattern, with the body consuming the previous day’s bearish candle. This suggests a shift in sentiment from bearish to bullish. Additionally, the price has tested and held above a critical psychological level at $100, with a potential confluence of support at $98.14 (prior low) and $97.46 (weekly low). The absence of a lower shadow in the recent candle reinforces the strength of the move, though a retest of $98.14–$98.98 could confirm its role as a dynamic support zone.
Moving Average Theory
Short-term momentum is confirmed by the 50-day moving average (DMA) crossing above the 200-DMA in a golden crossover, with the 50-DMA currently at ~$100.50 and the 200-DMA at ~$99.80. The 100-DMA (~$100.20) further aligns with this bullish bias. The price’s recent close above all three averages suggests an uptrend is in place, though a pullback to the 100-DMA could trigger a test of $98.50–$98.98 as a secondary support.
MACD & KDJ Indicators
The MACD histogram has turned positive, with the MACD line crossing above the signal line, reinforcing the bullish momentum. However, the KDJ oscillator shows the K-line at 82 and the D-line at 78, nearing overbought territory, which may indicate short-term exhaustion. A divergence between the KDJ and price action—such as the K-line failing to rise despite higher closes—could foreshadow a pullback.
Bollinger Bands
Volatility has expanded, with the price trading near the upper band, a common precursor to a potential mean reversion. The bands were previously constricting between $98.14 and $100.67 in mid-November, suggesting the current breakout was anticipated. If the price closes below the 20-day moving average (~$101.50), the lower band at ~$97.29 could become a critical support level.
Volume-Price Relationship
Trading volume surged to 2.78 million shares, a 130% increase from the prior day, validating the strength of the move. However, volume has been declining over the past five days despite higher prices, which may indicate weakening momentum. A sustained increase in volume during consolidation phases would be necessary to confirm the trend’s durability.
Relative Strength Index (RSI)
The 14-day RSI stands at ~68, approaching overbought levels, which aligns with the KDJ’s signal. While this does not necessarily indicate a reversal, it suggests caution for near-term traders. A close below 50 would signal a potential correction, with key RSI support levels at 55–58 coinciding with Fibonacci retracement levels.
Fibonacci Retracement
From the recent high of $104.33 to the low of $97.46, the 38.2% retracement level at $101.80 and 61.8% at $99.50 are critical. The price’s current position near $103.96 suggests the 61.8% level could act as a pivot for a counter-trend rally if the short-term uptrend stalls.
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The confluence of a bullish engulfing pattern, golden crossover in moving averages, and expanding Bollinger Bands strongly supports a continuation of the uptrend. However, the overbought RSI and KDJ readings, coupled with declining volume, highlight risks of a near-term pullback. Traders should monitor the $98.14–$98.98 support zone and $101.80–$103.96 resistance cluster for confirmation of trend sustainability. Divergences between momentum indicators and price action may provide early warnings of a reversal, particularly if volume fails to support further gains.