TD Bank Shares Plunge 4.3% Amid Technical Breakdown Below Key Moving Average

The Toronto-Dominion Bank (TD) closed at $72.85 in the latest session, declining 4.32% with elevated trading volume of 6.17 million shares. This significant drop forms the focal point of our technical assessment, which synthesizes multiple indicators to evaluate near-term momentum and structural positioning.
Candlestick Theory
The August 28 candlestick exhibits a decisive bearish engulfing pattern, with a wide range (high: $78.95, low: $72.73) and close near the session low. This follows three consecutive advances, suggesting exhaustion of upward momentum. Key resistance now solidifies at $76.50-$78.95 (recent highs), while immediate support lies at $72.73 (intraday low). A sustained break below $72.73 may expose the $70.00 psychological threshold.
Moving Average Theory
Price has breached the 50-day moving average ($73.50 approximation) for the first time since June, reflecting deteriorating intermediate momentum. The 100-day MA ($69.50) and 200-day MA ($62.00) maintain upward slopes, indicating persistent long-term support. However, the recent cross below the 50-day MA—particularly when accompanied by expanding volume—carries bearish implications for the intermediate trend.
MACD & KDJ Indicators
The MACD histogram has accelerated negatively after a bearish signal-line crossover, confirming building downward momentum. Concurrently, KDJ readings have entered oversold territory (K: <30, D: <35) following the sharp decline. While this condition frequently precedes technical rebounds, the velocity of the selloff and MACD deterioration suggest any recovery may initially face resistance near the $74.50 zone.
Bollinger Bands
Price closed below the lower Bollinger Band ($73.80 approximation), a rare event occurring only twice in the prior six months. Band width expanded 18% during the selloff, signaling volatility breakout. Historically, such deviations often precipitate mean-reversion bounces toward the 20-period midline ($74.50). However, the violation also denotes exceptional bearish pressure that typically requires consolidation before sustainable recovery.
Volume-Price Relationship
The selloff occurred on volume 60% above the 30-day average, validating bearish conviction. Distribution patterns have emerged as volume expanded on four of the last five down days. This contrasts with the prior rally's anemic volume, suggesting the advance lacked broad participation. For confidence in any rebound, volume should exceed 4 million shares on up days.
Relative Strength Index (RSI)
The 14-day RSI (approx. 28) reached oversold territory for the first time since March. While this implies excessive downside momentum, oversold RSI readings during primary uptrends often function as contrarian indicators. Nonetheless, the indicator's breach below the 40 level—a historical support zone during pullbacks—warrants caution until RSI stabilizes above 35.
Fibonacci Retracement
Applying Fib levels to the dominant uptrend from the December 2024 low ($51.25) to the August 2025 high ($76.14):
- 23.6%: $70.27
- 38.2%: $66.63
The current close ($72.85) hovers just above the 23.6% retracement. A violation would open a path toward $70.27, where confluence exists with psychological support. The 23.6% level warrants monitoring as potential pivot zone for institutional bids.
Confluence & Divergence Observations
A notable convergence of oversold signals exists: RSI <30, KDJ <30, and price below Bollinger Band—conditions that collectively suggest excessive pessimism. This aligns with TD's historical tendency to rebound from the $70-$72 support band. However, material bearish consensus emerges from MACD deterioration, volume-confirmed breakdown below the 50-day MA, and expanding volatility. Divergence appeared as price made higher highs in late August while RSI formed lower highs—a warning now validated by the correction. While oversold conditions favor tactical rebounds, sustained recovery requires reconquering the 50-day MA ($73.50) with accompanying volume expansion.