Cardinal Health Drops 1.42% Amid Bearish Technicals And Oversold Signals

Cardinal Health (CAH) declined 1.42% to close at $147.47 in the latest session, marking two consecutive days of losses totaling 1.71%. This downturn reflects ongoing bearish pressure within a broader technical context. The following analysis synthesizes multiple indicators to evaluate the stock’s trajectory, emphasizing confluences and divergences.
Candlestick Theory
Recent price action shows two consecutive bearish candles closing near session lows ($147.47), reinforcing short-term selling momentum. The September 19 high of $150.70 acts as immediate resistance, while critical support resides at the August 25 low of $146.04. A lower shadow in the September 22 candle suggests buyers attempted but failed to sustain a recovery, indicating vulnerability below $147.00. A confirmed close beneath $146.04 would signal bearish continuation.
Moving Average Theory
The 50-day moving average ($152.30) remains below the 100-day MA ($155.80), while both trend downward, reinforcing a bearish medium-term structure. The 200-day MA ($149.10) has been breached to the downside, with the current price ($147.47) trading below this key long-term indicator. The death cross (50-day crossing below 200-day in late August) persists, suggesting sustained bearish sentiment.
MACD & KDJ Indicators
The MACD histogram remains in negative territory, though its slope is moderating, indicating reduced downward momentum. Concurrently, the KDJ oscillator shows the %K line (19.3) below %D (25.6) and near oversold thresholds. While KDJ hints at potential exhaustion, MACD’s bearish alignment overshadows reversal prospects. Divergence emerges as KDJ’s oversold signal conflicts with MACD’s entrenched downtrend.
Bollinger Bands
Bollinger Bands have contracted notably, with bandwidth narrowing to 2.8% compared to 3.5% a month prior, signaling diminished volatility and impending directional bias. Price sits near the lower band ($146.80), typically an oversold signal. However, persistent closes below this band could denote weakness rather than reversal potential.
Volume-Price Relationship
Volume declined 45.7% in the latest session (1.99M shares vs. 3.66M previously), suggesting waning conviction in the downtrend. The August 12 breakdown (-7.21%) occurred on the year’s highest volume (7.85M shares), solidifying $146.30 as a volume-validated support. Recent pullbacks lack proportional volume spikes, implying cautious sentiment rather than capitulation.
Relative Strength Index (RSI)
The 14-day RSI reads 28.6, breaching the oversold (<30) threshold. Historically, similar levels (e.g., August 2025) preceded minor rebounds. However, RSI’s predictive reliability is tempered by its tendency to linger in oversold zones during strong downtrends. Bearish divergence is absent, limiting reversal conviction.
Fibonacci Retracement
Applying Fibonacci to the July 1 peak ($168.44) and August 25 trough ($146.04) shows the current price below all key retracement levels (38.2% at $154.60; 50% at $157.24). The failed retest of $152.38 (23.6% level) in mid-September confirms overhead resistance. Downside targets align with the 127.2% extension at $142.90 if $146.04 support breaks.
Confluence and Divergence
Strong confluence appears at $146.00–146.30, where the 200-day MA, Bollinger Lower Band, volume-anchored support, and major Fibonacci swing low converge. This area must hold to prevent accelerated selling. Divergence exists between oversold oscillators (RSI, KDJ) and bearish momentum signals (MACD, moving averages), reflecting market indecision. A confirmed break below $146.04 would resolve this tension bearishly, targeting $142.90. Meanwhile, recovery requires clearance above $150.70 to invalidate near-term weakness.
Probabilistically, the weight of evidence leans bearish below $150.70, with oversold indicators suggesting tactical rebounds are possible but unlikely to reverse the primary downtrend without volume-backed catalyst.