Thermo Fisher (TMO) Drops 0.28% as Death Cross and Bearish Patterns Signal Short-Term Bearish Bias

Thermo Fisher (TMO) has experienced a 0.28% decline in the most recent session, extending a 1.70% drop over the past three days. This downward momentum suggests a potential short-term bearish bias, though the broader context of technical indicators will determine if this trend is sustainable or corrective. Below is a structured analysis of key technical aspects influencing the stock’s near-term outlook.

Candlestick Theory

Recent price action reveals a series of bearish candlestick patterns, including a shooting star on October 6, 2025, and a bearish engulfing pattern on October 7, 2025, both signaling potential reversals from prior gains. Key support levels are identified at $450.00 (a prior multi-day consolidation zone) and $425.00 (a 2025 low). Resistance is clustered near $545.00–$550.00, where the stock faced rejection in late September. A break below $450.00 could trigger a retest of the $425.00 level, while a rebound above $545.00 may indicate renewed buying pressure.

Moving Average Theory

The 50-day moving average (currently at $498.00) has crossed below the 200-day MA ($512.00), forming a death cross that historically signals bearish sentiment. The 100-day MA ($490.00) further reinforces this downtrend, with the current price ($534.68) trading below all three major MAs. Short-term traders may watch for a potential golden cross (50-day crossing above 200-day) as a bullish signal, though this appears unlikely in the immediate term.

MACD & KDJ Indicators

The MACD histogram has shown negative divergence in recent sessions, with declining price lows despite a flattening histogram, hinting at weakening bearish momentum. The KDJ (Stochastic) indicator, however, has entered overbought territory (K: 85, D: 75) on October 6, 2025, suggesting potential exhaustion of the current downtrend. A bearish crossover in KDJ could confirm a short-term reversal.

Bollinger Bands

Volatility has expanded recently, with the bands widening to $530.00–$545.00, reflecting heightened uncertainty. The current price ($534.68) sits near the middle band, indicating a neutral position. A breakout above the upper band would require a close above $545.00, while a break below the lower band ($520.00) would confirm a bearish channel.

Volume-Price Relationship

Trading volume has spiked on declining sessions, with an average of $1.1 billion in October compared to $900 million in September. This positive divergence (higher volume on down days) supports the bearish case, as it suggests strong selling pressure. However, volume has declined in the past two sessions, which may indicate a potential near-term bottoming process.

Relative Strength Index (RSI)

The RSI has fluctuated between overbought (>70) and neutral levels in recent weeks. On October 6, 2025, it hit 72, entering overbought territory, but failed to sustain above 70, suggesting a lack of conviction in the downtrend. A close below 50 would confirm bearish momentum, with a target of 30 (oversold) as a potential entry point for contrarian traders.

Fibonacci Retracement

Key Fibonacci levels derived from the 2025 high ($549.26) and low ($423.00) include $495.00 (61.8%) and $470.00 (50%) as critical support zones. The current price ($534.68) is near the 23.6% retracement level, which may act as a temporary resistance before testing the 50% level.

Backtest Hypothesis

A strategy selling TMO when both RSI and KDJ are overbought (RSI >70 and KDJ K >80) from 2022 to October 2025 yielded a 40.05% return, underperforming the benchmark (64.96%) by 24.91%. The strategy’s Sharpe ratio of 0.82 and max drawdown of 0% suggest low volatility but limited outperformance. Recent signals (e.g., RSI overbought on October 6) align with the strategy’s sell conditions, yet TMO’s fundamentals remain robust, indicating that technical triggers alone may not suffice in capturing broader market trends.