CDW Extends Slide With 4.62% Two-Day Drop As Technicals Signal Bearish Momentum

CDW (CDW) declined 2.18% in the latest session, extending its two-day loss to 4.62%, as the stock closed at $156.97 amid persistent selling pressure. This technical assessment examines multiple indicators to contextualize the current price action.
Candlestick Theory
Recent candlesticks reveal deteriorating momentum, with CDW forming consecutive bearish candles on elevated volume. Key resistance now emerges near $164.58-$165.73 (September 23-24 highs), while the September 25 low of $156.66 establishes immediate support. A close below $156.66 would signal vulnerability to test the August 7 low of $160.43.
Moving Average Theory
The 50-day, 100-day, and 200-day moving averages all slope downward, confirming a sustained bearish trend. Current price trades below all three averages, with the 50-day SMA decisively crossing below the 200-day SMA in late August – a "death cross" typically portending extended weakness. This alignment suggests dominant selling pressure across timeframes.
MACD & KDJ Indicators
MACD maintains a bearish trajectory below its signal line and the zero threshold, reflecting accelerating downside momentum. Concurrently, the KDJ oscillator shows the %K line (16.8) and %D line (23.1) entrenched in oversold territory (<20), though without bullish crossovers. While both indicators agree on bearish momentum, their deep oversold readings suggest potential for a technical bounce – albeit not yet confirmed by reversal signals.
Bollinger Bands
Bollinger Bands have expanded notably during the September decline, indicating heightened volatility. Price consistently hugs the lower band, confirming strong downward momentum. The 20-day SMA (mid-band) now near $167 acts as dynamic resistance. Continued band expansion would support further downside, while contraction could precede consolidation.
Volume-Price Relationship
Volume surged 42% during the September 24 sell-off ($381M vs. 30-day avg ~$240M), validating bearish conviction. The subsequent session saw reduced volume ($265M), suggesting limited capitulation but also lacking buyer interest. Sustained closes below $160 on elevated volume would indicate institutional distribution, whereas a reversal would require bullish confirmation via volume expansion.
Relative Strength Index (RSI)
The 14-day RSI sits at 28.6, firmly in oversold territory. However, RSI has remained sub-30 for four sessions without triggering a meaningful rebound – a characteristic of strong downtrends. While statistically extended, this condition alone does not constitute a reversal signal without supporting evidence (e.g., bullish divergence or volume confirmation). Historical oversold RSI readings in May and August preceded only temporary relief rallies.
Fibonacci Retracement
Applying Fibonacci levels to the July 29 high ($182.18) and September 25 low ($156.66): the 23.6% retracement at $166.78 converges with the 50-day SMA ($167), creating a critical resistance zone. A sustained break above this confluence is needed to invalidate the bearish structure. Downside targets include the 100% extension at $151.14 should $156.66 support fail.
Confluence & Divergence
Confluence emerges in the resistance between $164.58-$167, where candlestick highs, the 50-day SMA, and Fibonacci 23.6% level align. Notably, while KDJ and RSI indicate oversold conditions, they diverge from MACD’s persistent bearish momentum reading – a caution against premature long entries. Volume patterns further corroborate the dominant downtrend, with no technical evidence yet supporting a material reversal. Traders should monitor the $156.66-$166.78 range for breakout confirmation, with probabilities favoring downside resolution unless volume-supported reclamation of $167 occurs.