Wheaton Precious Metals Jumps 8.38% In Two Days As Golden Cross Signals Bullish Trend

Wheaton Precious Metals (WPM) concluded the latest session at $95.72, posting a significant 4.72% gain and extending its rally to an 8.38% increase over two consecutive trading days. This strong upward momentum warrants a multi-faceted technical assessment using the requested framework.
Candlestick Theory
Recent price action displays a robust recovery following a prior downtrend. The July 8th session formed a bearish engulfing candle near $92.16, establishing a key resistance level. This resistance was decisively breached with high conviction during the latest rally, transforming it into support. Current strength is evident, but the proximity to the psychologically significant $100 level may induce profit-taking. Immediate support now resides near the July 18th low of $88.32, aligning with the 200-day moving average.
Moving Average Theory
The 50-day MA (~$91.80) crossed bullishly above the 200-day MA (~$88.00) in late June, generating a "Golden Cross" – a strong long-term bullish signal. Current trading well above all key moving averages (50, 100, 200-day) confirms the uptrend. However, the significant gap between price and the 50-day MA (~$91.80) suggests a potential near-term consolidation or pullback to retest this dynamic support level, which would offer a healthier entry point.
MACD & KDJ Indicators
The MACD line remains above its signal line and in positive territory, confirming bullish momentum, although the histogram shows signs of flattening, suggesting momentum may be plateauing. The KDJ indicator, particularly the %K line (approx. 88.3), signals overbought conditions (above 80), increasing the risk of a short-term pullback. No bearish crossover is imminent in KDJ yet, but convergence near overbought extremes warrants caution. A potential bearish divergence could form if price makes new highs while MACD fails to confirm.
Bollinger Bands
Price has decisively broken above the upper Bollinger Band (approximately $93.10 based on a 20-day window), indicating exceptional strength but also suggesting a statistically extended move likely to revert towards the mean (20-day SMA near $91.80). The bands themselves expanded notably during the latest surge, confirming elevated volatility on the breakout. Expectation for price to consolidate or retrace towards the middle band (20-SMA) is high.
Volume-Price Relationship
The rally has been validated by strong volume. The July 22nd surge occurred on significantly above-average volume (~2.99M shares), confirming buyer conviction and adding sustainability to the breakout. Volume was also supportive during the initial leg up on July 21st (~1.53M shares vs. prior sessions). This volume profile underpins the bullish price action. Monitoring for declining volume on further advances or rising volume on pullbacks is crucial for trend health.
Relative Strength Index (RSI)
The 14-day RSI currently sits at approximately 71.4, breaching the overbought threshold of 70. This reinforces the signal from the KDJ indicator, warning of an extended short-term move and increasing the probability of consolidation or a retracement. Historically, similar RSI peaks (e.g., early July) preceded pullbacks, though sustained RSI readings above 70 in strong trends are possible. This signal should be treated as a warning, not a definitive reversal indicator.
Fibonacci Retracement
Applying Fibonacci levels to the significant advance from the June low near $57.48 to the current peak ($96.40) provides critical potential retracement zones. The 38.2% retracement level rests near $81.88, aligning with the 100-day MA, offering major support. The 50% level coincides near $76.94, but a retracement this deep seems less probable in the current strong trend. The 61.8% level near $72.00 represents a major downside target only relevant if the broader uptrend falters. Conversely, extensions beyond $96.40 target the 127.2% level near $107.50.
Confluence and Divergence
Confluence: Bullish signals converge effectively. The price breakout above $92.16 resistance aligns with the bullish Golden Cross and supportive volume. The breach of the upper Bollinger Band further confirms this strong upward thrust. The key $88-$92 zone (prior resistance, 200-day MA) now acts as formidable support.
Divergence: Potential warnings emerge regarding near-term sustainability. The overbought RSI and KDJ readings clash with the continued aggressive price ascent, creating a short-term momentum divergence. The Bollinger Band breakout also signals an extended position needing consolidation. While MACD remains constructive, its flattening histogram adds to these cautionary signals.
Conclusion
Wheaton Precious Metals exhibits a robust technical uptrend confirmed by the Golden Cross, sustained trading above key moving averages, and volume-backed price breakout. Major resistance near $92.16 has transformed into support, underpinning the structure. However, significant gains over a short period, coupled with overbought oscillators (RSI >70, KDJ >80) and a Bollinger Band breakout, suggest a near-term consolidation or pullback towards the $92.16-$91.80 zone (prior resistance/new support & 50-day MA) is highly probable. This would offer a more sustainable base for potential further upside targeting $100, contingent on maintaining volume support and key technical levels. Traders should monitor for divergences developing in MACD or RSI against any new price highs.