Toast Stock Plunges 7.10% as Technicals Signal Bearish Breakdown Below Key Support

Toast (TOST) concluded its latest session at $41.50, marking a 7.10% decline amid elevated trading volume of 13.3 million shares. This technical analysis examines the stock’s behavior using multiple frameworks to identify critical patterns and potential forward paths.
Candlestick Theory
Recent price action reveals a bearish sequence culminating in yesterday’s long red candle closing near its low of $41.48. This breach below the multi-week support zone of $42.50-$43.00, now converted resistance, confirms weakening momentum. The pattern preceding this – a small bullish candle on 2025-06-23 followed by indecisive doji-like formations – signaled exhaustion after a rebound attempt from early June. Key resistance now resides at $44.67 (prior swing high), while the $40.00 psychological level and the 61.8% Fibonacci retracement (discussed later) offer potential downside targets.
Moving Average Theory
Toast trades below all major moving averages (50D ~$42.80, 100D ~$41.60, 200D ~$37.80), reflecting a bearish stacked alignment. The recent breakdown below the 100D MA after repeated rejections near the 50D MA reinforces intermediate-term downward momentum. The 200D MA continues rising, suggesting long-term support could emerge near $37.80, though the widening gap between short-term and long-term averages indicates accelerating selling pressure. A sustained move above the clustering 50D/100D MAs would be needed to signal recovery potential.
MACD & KDJ Indicators
The MACD histogram (-0.72) demonstrates persistent negative momentum, with both MACD and signal lines entrenched in bearish territory below zero. KDJ readings (K=18, D=24, J=6) entered oversold thresholds, reflecting the recent capitulation. While historically oversold KDJ has preceded tactical rebounds, the absence of bullish divergences and MACD confirmation suggests limited reversal credibility. A KDJ bullish crossover concurrent with MACD histogram improvement could signal a short-term reprieve.
Bollinger Bands
Violation of the lower Bollinger Band (currently ~$40.50) coincides with expanding band width (14% expansion in 5 sessions), confirming elevated volatility-driven selling. The close below the lower band after two weeks of range contraction between $42.00-$44.00 implies an initiation breakdown. While reversion toward the middle band ($43.20) is statistically probable, the momentum-driven extension may persist until bands stabilize or price reclaims the $41.48 lower band boundary as support.
Volume-Price Relationship
Yesterday’s sell-off occurred on the highest volume in over a month (13.3M shares vs 30D avg ~6.5M), validating the bearish breakout. The preceding rally attempt to $45.14 (2025-06-24) registered lower volume than the subsequent decline, indicating weak buying conviction and distributor activity. Volume divergence has preceded recent reversals – notably before the May drop from $45.56 – reinforcing that sustainable advances require accumulation validation.
Relative Strength Index (RSI)
The 14-day RSI (34.2) approaches oversold territory but remains above the late-May low of 28. Though not yet signaling extreme undervaluation, three consecutive lower price lows have aligned with marginally higher RSI readings, hinting at nascent positive divergence. Any RSI rebound above 50 without corresponding price strength would constitute a bearish warning, whereas an oversold trigger below 30 aligned with volume exhaustion may encourage contrarian entries.
Fibonacci Retracement
Applying Fib levels to the upswing from the 2025-02-07 low of $22.71 to the 2025-05-13 high of $45.56 reveals key support thresholds. The 38.2% retracement ($37.10) aligns with the 200D MA, while the 50% level ($34.13) intersects with the February consolidation base. Short-term Fibs drawn from the recent $45.56 high to yesterday’s $41.48 low show initial resistance at $43.04 (38.2%) and $43.52 (50%). Confluence exists near $40.17 where the 61.8% long-term retracement meets March’s pivotal high.
Confluence and Divergence Observations
Critical confluence resides at the $37.80-$38.00 zone, merging the 200D MA, 38.2% long-term Fibonacci, and January breakout level – a high-probability support region. Bearish confluence is evident between $42.44-$42.50, combining the short-term 23.6% Fib, June’s broken support, and Bollinger midline. A notable positive divergence exists in RSI, conflicting with MACD’s entrenched bearishness and volume-confirmed breakdown, suggesting tactical rebound potential but lacking broader reversal catalysts. Traders should monitor the $40.00-$40.17 band for signs of exhaustion versus continuation, with confirmation requiring either a recovery above $43.00 or a breakdown beneath $37.80.