WAB Jumps 4.91% On Heavy Volume As Technicals Signal Bullish Reversal

Westinghouse Air Brake (WAB) surged 4.91% to close at $197.96 in the latest session, accompanied by substantially elevated volume of 2.31 million shares. This strong bullish momentum breaks below the recent consolidation range and warrants comprehensive technical evaluation across multiple indicators.
Candlestick Theory
The recent price action reveals a bullish reversal pattern. The 9/22 session formed a long bullish candle that engulfed the prior three days’ range, closing near its high of $201.94 after testing support at $188.20. This establishes $188.20 as immediate support and $201.94 as a resistance threshold. Earlier price reactions at $185.65 (9/17 low) and $214.38 (7/23 peak) further define key support and resistance zones.
Moving Average Theory
The 50-day SMA (≈$192.80) was decisively breached in the latest rally, suggesting bullish momentum. The current price now challenges the 100-day SMA (≈$198.50). A sustained close above this level may signal a trend reversal. The 200-day SMA (≈$194.00) provides underlying support. The imminent 50/200-day golden cross formation could reinforce the bullish bias, though the 100-day SMA overhead resistance remains a near-term hurdle.
MACD & KDJ Indicators
MACD exhibits a bullish crossover with the histogram turning positive, confirming improving momentum. KDJ oscillators show %K (84) and %D (79) converging in overbought territory after emerging from oversold readings two sessions prior. While this hints at near-term exhaustion risk, the strong momentum crossover suggests further upside potential before a significant retracement.
Bollinger Bands
The 9/22 rally propelled prices from the lower band toward the upper band ($203.50, 20-day basis), coinciding with a band expansion after the tightest contraction in three weeks. This volatility breakout validates directional momentum. The current price near the upper band indicates stretched conditions, but continued band expansion may accommodate further upside.
Volume-Price Relationship
The bullish reversal on 9/22 was confirmed by volume surging 80% above the 20-day average – the highest volume since 8/26. This distribution-backed breakout contrasts with the light volume during the preceding decline, supporting sustainability. Volume also expanded during the 4.35% rally on 5/12 and the 9.74% surge on 4/09, confirming WAB’s tendency for volume-validated breakouts.
Relative Strength Index (RSI)
The 14-day RSI (≈65) has rebounded sharply from near-oversold levels (32 on 9/18) but remains below the overbought threshold. This leaves room for additional upside before reaching cautionary territory. Notably, the higher low in RSI during the 9/17 price low at $185.65 established a positive divergence, warning of weakening bearish momentum ahead of the current rally.
Fibonacci Retracement
Based on the $214.38 high (7/23) and $185.65 low (9/17), key retracement levels cluster near $196.62 (38.2%) and $200.01 (50%). The close at $197.96 breaches the 38.2% level, with the 50% retracement aligning with psychological $200 resistance. A decisive break above $200.01 may target the 61.8% level at $203.41.
Confluence and Divergence
Notable confluence exists at $196.50–$198.50, where the 100-day SMA, 38.2% Fibonacci level, and latest high-volume breakout zone converge – reinforcing this as critical support for bullish continuation. Divergence is observed in volume trends: declining volume during the July–September downswing versus expanding volume on the current reversal. This suggests accumulation, strengthening the reversal thesis. The primary risk remains bearish divergence between the overbought KDJ and Bollinger stretch against the price surge, indicating possible near-term consolidation.