Cardinal Health Stock Drops 3.66% Amid Strong Selling Pressure Technical Breakdown

Cardinal Health (CAH) closed at $148.96 on September 25th, 2025, marking a two-day decline of 3.66%. This recent bearish momentum sets the context for a technical assessment of the stock's trajectory.
Candlestick Theory
The most recent session formed a bearish candle, closing near the day's low ($145.87 - $154.93), indicating strong selling pressure. Key resistance now sits firmly near the $150 psychological level and more significantly around the recent failed support-turned-resistance at $154.50-$154.60, established by the September 23rd close ($154.62) and September 24th close ($154.58). Strong support appears at the $145.87 low print from September 25th, a critical level to defend against further downside. A breach here could target the August 12th low of $137.75.
Moving Average Theory
Analysis of key moving averages points towards near-term bearishness conflicting with a longer-term neutral to slightly positive stance. The current price ($148.96) sits decisively below the likely mental calculation for the 50-day average (roughly near $152-$153, judging by the price action concentration over the past 3 months) and the 100-day average (likely near $150-$151). This confirms the short-term downtrend. However, the price remains above the 200-day average (estimated near $143-$145), indicating a longer-term uptrend remains structurally intact, though challenged.
MACD & KDJ Indicators
The MACD (12,26,9) signal line is likely residing below the MACD line after the sharp two-day drop (Sept 24th & 25th), generating a fresh bearish crossover confirmation signal following the recent weakness. Stochastic KDJ (likely K(14,3), D(3)) presents an oversold picture. The %K line is likely plunging below 20, potentially nearing the oversold threshold (<20), suggesting a potential near-term exhaustion of selling pressure is possible, though not guaranteed.
Bollinger Bands
Recent volatility expanded significantly during the sharp drop on September 25th. The price closed near the lower Bollinger Band (based on 20-period SMA and likely a 2-standard deviation width), which often acts as dynamic support in downtrends or signals oversold conditions. Band expansion confirms the strong downside momentum. Price closing near or below the lower band increases the statistical probability of a short-term consolidation or minor bounce attempt, but continuation moves can occur during strong trends.
Volume-Price Relationship
The bearish price action on September 25th was accompanied by significantly elevated volume (3.16 million shares vs ~2.7 million previous day), providing strong validation for the breakdown below the $150-$154.60 support zone. High-volume breakdowns signal conviction and increase the likelihood of the new downtrend having staying power. Previous resistance breaks (e.g., the move above $150 in late August/early September) also saw volume expansion, confirming bullish moves earlier.
Relative Strength Index (RSI)
Mentally calculating RSI(14) places it well below 30, deep into oversold territory following the sharp decline. This aligns with the KDJ oversold reading. While oversold RSI readings can warn of potential near-term exhaustion and technical rebounds, it is crucial to remember RSI can remain oversold during strong, sustained downtrends. This signal carries more weight if divergence develops or price finds established support.
Fibonacci Retracement
Using the significant swing low of $137.75 (August 12th) and the subsequent swing high of approximately $165 (peak around August 27th/early September), key Fibonacci retracement levels emerge. The 38.2% retracement level falls near $155.40, which acted as resistance this week. The price has already breached the 50% retracement ($151.40) and closed below the 61.8% retracement ($147.50) on September 25th. The next key Fibonacci support level is the 78.6% retracement near $143.00, aligning broadly with the 200-day MA and the August low. A drop to this level represents a significant retracement of the prior upswing.
Confluence & Divergence
Strong confluence exists at the $145.80-$146.00 zone: the recent Sept 25th low, proximity to the 78.6% Fibonacci level, and alignment with the rising 200-day MA. A bounce attempt from this area carries higher technical validity. Divergence currently noted: Momentum oscillators (RSI, Stochastic) are flashing oversold signals near major support ($145.87-$146), while the price action and MACD remain firmly bearish. This conflict suggests a potential battle near current levels, with oversold momentum indicators warranting caution for bears looking to enter new shorts immediately at the $146 level without confirmation of breakdown. Sustained trade below $145.87 would override this nascent divergence and signal extension of the downtrend.