Cummins Shares Drop 3.19% To $413.08 Amid Bearish Technical Signals And 5.33% Two-Day Slide

Cummins (CMI) shares declined 3.19% to close at $413.08 on October 10, 2025, marking the second consecutive daily loss and bringing the two-day decline to 5.33%. This downturn occurred on above-average volume of 684,391 shares, suggesting increased selling pressure.
Candlestick Theory
Recent candlestick patterns reveal bearish momentum, with the last two sessions forming long red candles closing near their lows. This follows a failed recovery attempt on October 8th (small green candle with upper wick), indicating resistance near $437. Key support emerges at $412.76 (October 10th low), while the $430–$440 zone now acts as resistance, reinforced by multiple highs in early October. A decisive break below $412 could trigger further downside toward the $405–$398 support area.
Moving Average Theory
The 50-day moving average (approximately $425) recently crossed below the 100-day MA (near $415), signaling deteriorating medium-term momentum. Price has broken below both, though it remains above the rising 200-day MA (~$375), indicating persistent long-term uptrend but deteriorating intermediate structure. The death cross between the 50-day and 100-day MAs reinforces bearish near-term bias, with recovery potential capped near the 50-day MA at $425.
MACD & KDJ Indicators
MACD exhibits a bearish crossover, with the signal line overriding the MACD line below zero, confirming negative momentum. Meanwhile, KDJ shows the %K line (17) and %D line (25) plunging into oversold territory after exiting the overbought zone (>80) in late September. While this suggests extreme near-term selling, both indicators lack reversal signals, aligning with the current downtrend. Confluence in bearish momentum signals heightens downside risk.
Bollinger Bands
Bollinger Band width expanded sharply during the two-day selloff, indicating rising volatility favoring bears. Price closed near the lower band (~$410) on October 10th, typically an oversold signal. However, this must be contextualized by the confirmed breakdown below the middle band (20-day SMA, ~$420). A sustained position below the lower band could foreshadow a volatility-driven continuation pattern, though mean-reversion bounces often follow such extremes.
Volume-Price Relationship
Distribution signals emerged as the two decline days (October 9–10) saw higher-than-average volume (684K and 595K shares versus 30-day avg ~780K), validating bearish conviction. This contrasts with the preceding rally days (e.g., October 6th: 1.40% gain on 853K volume), which lacked commensurate volume support. Declines on expanding volume increase confidence in near-term downside sustainability.
Relative Strength Index (RSI)
The 14-day RSI (34.2) has entered oversold territory after rejecting the overbought zone (peaking at 72 on September 18th). While traditionally signaling exhaustion, RSI can remain oversold during strong trends. Its downward slope and lack of positive divergence suggest undissipated selling pressure. A climb above 40 would be needed to signal improving momentum.
Fibonacci Retracement
Applying Fibonacci to the swing low of $290.73 (April 22, 2025) and high of $440.51 (October 6, 2025), key retracement levels are $405.16 (23.6%), $383.30 (38.2%), and $365.62 (50%). The current price sits just above the 23.6% level ($405), aligning with the psychological $400–$405 support zone. A breach could accelerate declines toward $383–$365, where the 38.2%–50% retracements converge with the 200-day MA, creating a high-probability stabilization area.
Confluence and Divergence
Confluence appears at $405–$412 (Fibonacci 23.6%, recent lows, and Bollinger lower band), making it a critical defensive zone for bulls. Divergences are limited, though RSI’s oversold reading slightly conflicts with KDJ’s more extreme oversold signal. The MACD/MA/volume alignment overwhelmingly supports continued near-term bearishness absent a recovery above $426–$430 resistance. Given the breakdown below key MAs and momentum confirmation, further downside toward $405 appears probable before a technical rebound.