Arm Holdings Plunges 5.29% Amid Bearish Technical Breakdown Below Key $142 Support

Arm Holdings (ARM) declined by 5.29% in the latest session, closing at $146.88 after trading between $145.40 and $154.00 on substantial volume of 6.67 million shares, reflecting intensified selling pressure.
Candlestick Theory
Recent candlestick patterns exhibit bearish momentum, with the July 7 session forming a long red candle closing near its low after a failed rebound attempt on July 3. This breakdown confirms resistance near $157–$161, the consolidation zone established in late June. Critical support emerges at $135–$142, aligning with June’s congestion area and the February gap-up level. A breach below $142.50 may accelerate selling, while reclaimed resistance sits at $154–$155, marked by the July 7 high and the breakdown point.
Moving Average Theory
The 50-day moving average (circa $148.50–$150) crossed below the 100-day MA (near $153) in early July, signaling deteriorating medium-term momentum. Current price trades below both, with the 200-day MA (approximately $140–$142) providing major long-term support. The convergence of death crosses (50/100-day and 50/200-day) underscores bearish alignment, though a hold above the 200-day MA could stall the downtrend.
MACD & KDJ Indicators
MACD shows sustained bearish divergence, with the histogram deepening into negative territory since late June, confirming downward momentum. KDJ oscillators reflect oversold conditions, with the K-line plunging below 20 and the J-line nearing zero after July 7’s selloff. While this warns of a potential technical rebound, the lack of bullish crossover in MACD or KDJ tempers reversal expectations. Notably, KDJ’s oversold signal diverges from MACD’s bearish persistence, suggesting unresolved downward pressure.
Bollinger Bands
July’s breakdown propelled prices below the lower Bollinger Band (near $148), indicating extreme downside volatility. Bandwidth expansion confirms rising volatility, typical of trending moves. The close beneath the lower band may foreshadow continued weakness, though a reversion toward the 20-day midline ($152–$155) could occur if selling exhausts. Persistent band expansion without mean reversion would validate bearish momentum.
Volume-Price Relationship
The July 7 decline occurred on 167% higher volume than the 30-day average, confirming bearish conviction. This volume surge eclipsed the buying volume seen during the late June rally near $168, underscoring distribution. Notable bearish volume spikes also accompanied the breakdowns on May 8 and April 9, reinforcing their role as resistance markers. Low-volume rebounds (e.g., July 3) lack sustainability, emphasizing the significance of high-volume support tests near $135–$142.
Relative Strength Index (RSI)
The 14-day RSI plunged to 30.5 after the July 7 selloff, entering oversold territory for the first time since May. While this may signal short-term exhaustion, RSI’s downtrend from June’s overbought peak (73.6) aligns with the price trajectory. Historical oversold RSI readings in January and April preceded sharp recoveries, but confirmation via bullish divergences or volume-backed reversal candles remains absent. Traders should note RSI may linger in oversold zones during strong downtrends.
Fibonacci Retracement
Applying Fibonacci to the April low ($82.50) and June high ($168.31) places the 38.2% retracement at $135.00 and the 50% level at $125.40—key downside targets confluent with multi-month support. The 61.8% retracement ($115.90) aligns with May’s consolidation base. Recent price rejected the 23.6% level ($154.50), turning it into resistance. Confluence exists at the 38.2% Fib ($135) and the 200-day MA ($142), making $135–$142 a critical demand zone where buyers may emerge.
Confluence and Divergence
Confluence centers at $135–$142, merging the 38.2% Fibonacci level, 200-day MA, and May-June support. This zone offers a high-probability reversal area if tested with oversold RSI/KDJ readings and bullish volume confirmation. Divergence arises between momentum oscillators (RSI/KDJ signaling oversold extremes) and trend-following tools (MACD/Bollinger Bands affirming downtrend), reflecting tension between exhaustion and persistent selling pressure. Bullish reversals require validation through reclaimed resistance ($150) and improving volume dynamics.