Stock Plunges 4.16% As Key 188 Resistance Holds Amid Technical Breakdown

On the most recent trading session (2025-09-02), the stock closed at 178.78, a notable 4.16% decline from the prior close. This session recorded a trading range of 176.5 to 181.86, accompanied by volume of 5.165 million shares and transaction value of 922 million. This sharp pullback followed a series of attempts to breach the 188–189 resistance zone in late August and is positioned within a broader technical context as analyzed below.
Candlestick Theory
The August 26–29 period formed a cluster of narrow-range candles near the 188 resistance, culminating in a decisive bearish marubozu-like candle on September 2 (open near high, close near low). This rejection pattern confirmed the significance of the 188–189 resistance level. Immediate support is observed at 176.5 (intraday low), with secondary support near 173.7 (August 20 low). A sustained break below 176.5 could trigger further downside toward the 168–170 zone, which aligns with a prior consolidation area.
Moving Average Theory
The 50-day moving average (approximately 160–165) remains above both the 100-day (roughly 145–150) and 200-day (~120–125) averages, indicating an intact intermediate-to-long-term uptrend. However, the recent close (178.78) has converged toward the 50-day MA after trading comfortably above it throughout August. A decisive close below the 50-day MA could signal weakening short-term momentum, while the 168–170 area (aligning with Fibonacci support) now represents critical confluence support.
MACD & KDJ Indicators
MACD likely completed a bearish crossover below its signal line during the late-August consolidation near 188, corroborating the resistance rejection. Concurrently, the KDJ oscillator—previously elevated in overbought territory (>80)—has turned downward sharply, with the %K line crossing below %D. This momentum reversal suggests waning buying pressure. A further slide in the KDJ toward 40–50 could indicate accelerating bearish momentum.
Bollinger Bands
Volatility expanded during the August rally as prices hugged the upper band, peaking at 188.88 on August 27. The September 2 decline brought prices near the lower band edge, coinciding with the 176.5 intraday low. Bandwidth remains elevated relative to mid-July levels, signaling ongoing volatility. A breach of the lower band, particularly with elevated volume, would intensify bearish pressure, while a rebound from this band may denote near-term support.
Volume-Price Relationship
The 19.07% surge on August 12 (volume: 19.4 million shares) validated the breakout above 165, confirming institutional accumulation. Conversely, the September 2 decline occurred on above-average volume (5.17 million vs. 30-day avg. ~4.5 million), suggesting distribution. This volume-backed breakdown increases confidence in the resistance reversal thesis. Sustained selling pressure would manifest as follow-through volume exceeding 6 million shares on continued declines.
Relative Strength Index (RSI)
The 14-day RSI is estimated to have fallen from overbought levels (>70 in late August) toward 50–55 after the September 2 drop, reflecting easing bullish momentum. While not yet oversold (<30), a break below 50 would reinforce the bearish near-term bias. Divergence appeared in late August as prices tested 188 while RSI formed a lower high—a classic warning of weakening momentum preceding reversals. Further downside to 40–45 RSI may precede stabilization.
Fibonacci Retracement
Applying Fibonacci levels to the swing low of 102.94 (November 15, 2024) and high of 188.88 (August 27, 2025) reveals key retracement supports: 23.6% (168.6), 38.2% (156.05), and 50% (145.91). The current price sits between the 168.6 and 156.05 levels, with the 23.6% retracement (168.6) now representing critical support. This level converges with the 50-day MA zone (165–170), establishing a high-probability bounce area should the pullback extend. A break below 168.6 may open a path toward 156.
Confluence and Divergence
Confluence of support exists near 168–170 (50-day MA + 23.6% Fibonacci + prior price consolidation lows), making this zone pivotal for buyers to defend. Bearish confluence appears at 188–189 (candlestick resistance + overbought oscillators + volume barrier). Divergence is noted between price (August highs) and RSI (lower high), which preceded the reversal. The MACD/KDJ bearish crossovers also aligned with the candlestick rejection, strengthening the case for corrective continuation. A breach below 168 may trigger accelerated selling toward the 156 Fibonacci support, whereas recovery above 181.86 could revive bullish sentiment.