Fortinet Drops 3.31% as Bearish Technicals Reinforce Downtrend Below Key $81 Resistance

Fortinet (FTNT) declined 3.31% to $78.09 in the most recent session, closing near the day's low of $77.10. This price action occurs within a broader technical context outlined below.
Candlestick Theory
Recent sessions show rejection at the $81.28 resistance level, forming a bearish engulfing pattern on August 19th. This follows two consecutive bullish candles, indicating exhaustion near the upper boundary of the $74-$81 trading range established since early August. Key support is observed at $76.80-$77.10, corresponding to the August 14th-15th lows. Resistance remains firm at $81.20-$81.30, tested multiple times in August.
Moving Average Theory
The 50-day, 100-day, and 200-day moving averages (approximated at $95.5, $95, and $98.9 respectively) exhibit a bearish alignment, with the price trading below all three. The 50-day SMA crossing below the 100-day SMA in early August confirmed medium-term bearish momentum. This hierarchy suggests sustained downward pressure, with rallies likely facing resistance near the clustered 50/100-day SMAs.
MACD & KDJ Indicators
MACD remains in negative territory with a bearish crossover intact, reflecting persistent downward momentum since early August. KDJ oscillators hover near oversold levels, with the %K line at 15 and %D at 25. While this indicates potential short-term exhaustion, the absence of bullish crossovers limits reversal signals. Both momentum indicators align with the broader downtrend.
Bollinger Bands
The 20-day Bollinger Bands (centerline ~$90.75) expanded dramatically during the August 7th breakdown. Current price action near the lower band ($75.50 estimated) coincides with heightened volatility, though the band compression in mid-August failed to yield a sustainable breakout. The rejection at the upper band on August 18th-19th reinforces bearish control.
Volume-Price Relationship
Distribution spikes accompanied key down days: August 7th volume (47.4M shares) exceeded its 30-day average by 500%, confirming capitulation. Recent down days (August 19th: 15.0M shares) continue to show higher volume than up days, validating bearish continuation. Accumulation on August 12th (15.5M shares) briefly stabilized prices but lacked follow-through.
Relative Strength Index (RSI)
The 14-day RSI (~35) approaches oversold territory but remains above the August low of 28. This divergence from the price's higher low on August 19th suggests weakening downward momentum. While not yet signaling a reversal, it may precede short-term consolidation near the $76.80-$77.10 support zone.
Fibonacci Retracement
Applying Fib levels to the $96.58 (August 6th peak)-$72.83 (August 8th trough) range shows critical resistance at the 61.8% retracement ($81.90). The August 19th high ($81.28) precisely tested this level before reversing. The 38.2% ($85.50) and 50% ($84.70) levels now act as intermediate resistance, while the 23.6% ($90.98) remains a major recovery hurdle.
Synthesis
Confluence materializes at the $81.20-$81.30 resistance, where Fib retracement, Bollinger Band resistance, and recent swing highs converge. Bearish volume confirmation and MACD alignment suggest limited upside potential below this zone. While oversold RSI and KDJ readings warrant monitoring for stabilization near $77 support, the dominant trend remains bearish below the moving average cluster. A decisive break below $76.80 could trigger acceleration toward the $72.83 trough, whereas reclaiming $81.30 is necessary to invalidate the downtrend.