Charter Communications Plunges 29.50% In Four-Day Rout To $280.68

Charter Communications (CHTR) concluded the latest session at $280.68, marking a significant 5.90% decline, culminating in a four-day losing streak that erased 29.50% of its value. This dramatic downturn, characterized by heavy selling volume, particularly on July 25th, sets the context for this technical analysis.
Candlestick Theory
Recent price action exhibits decisive bearish momentum. The July 24th and 25th sessions formed long red candles confirming the break below the psychologically significant $380 support level. The sharp drop culminated in a potential hammer pattern (low: $280.11) on July 29th, suggesting tentative exhaustion near $280. However, this requires bullish confirmation in subsequent sessions. Resistance has formed firmly near $300-$310, while the $380-$400 zone, previously robust support, is now a major resistance area. The $280 level emerges as critical short-term support.
Moving Average Theory
Bearish alignment dominates across key averages. The recent crash pushed the price far below the estimated 50-day (likely around $360), 100-day (approx. $350), and 200-day (around $345) moving averages, confirming a steep downtrend. This wide dispersion signals severe bearishness and oversold conditions. The 50-day crossing below both the 100-day and 200-day averages ("Death Cross") reinforces the established downtrend. Prices remain deeply below all significant MAs, indicating strong downward pressure.
MACD & KDJ Indicators
Momentum indicators signal deep oversold territory but lack bullish reversal confirmation. The MACD line should be significantly below its signal line and deep in negative territory following the sharp plunge, showing pronounced bearish momentum. While deeply oversold, sustained negative territory signals persistent selling pressure. Similarly, the KDJ's %K and %D should have plunged, with the J-line likely below 0 (or near 10) – a classic oversold condition. However, in strong downtrends, these oscillators can remain oversold for extended periods without an immediate bounce. Divergences, particularly positive ones where price makes new lows but the oscillators hold above prior lows, were absent during the main descent.
Bollinger Bands
Volatility surged during the crash, reflected in a rapid expansion of the Bollinger Bands, particularly the lower band plunging. The price spent several days pushing through or trading significantly below the lower band, an extreme event suggesting a potential exhaustion move. The formation of the July 29th candle near the lower band at $280.11 might indicate a short-term capitulation point. Any consolidation near this zone could cause band contraction, often preceding the next significant move. Recovery targets initially lie near the midline (estimate ~$340), now acting as formidable resistance.
Volume-Price Relationship
Volume dynamics validate the bearish trend's severity. The collapse from $380 to $309 on July 25th occurred on significantly high volume (9.6M shares), signaling capitulation selling and strong conviction behind the breakdown. Subsequent sessions saw elevated volume on continued declines (July 28th, 29th), indicating sustained selling pressure. The lighter volume on the marginal intraday recovery attempts (like July 29th's bounce off $280) suggests a lack of strong buying interest so far. Sustainable recovery would require higher volume on up days, particularly for overcoming resistance levels like $300.
Relative Strength Index (RSI)
Based on the recent sharp decline, the 14-day RSI is likely near or below 20-25, significantly oversold (<30). Readings this low often precede short-term bounces due to exhaustion. However, the RSI can remain oversold during powerful downtrends. Its persistently low level confirms intense downside momentum but lacks independent predictive power for a reversal. A sustained move above the 30 level and divergence from new price lows would be needed to strengthen a potential bullish reversal signal. It serves as a warning of stretched conditions, not a timing signal.
Fibonacci Retracement
Applying Fibonacci levels to the dominant long-term downtrend (from the approximate yearly high near $420 observed in late May to the recent low near $280) provides potential recovery targets. Key retracement levels are: 23.6% ($317-$318), 38.2% ($338-$340), and 50% ($350-$352). Given the steep fall, the 38.2% level (converging near the significant prior $340-$350 support zone and the estimated Bollinger Midline) poses a substantial initial resistance barrier. The 50% level aligns with the broken 200-day MA, reinforcing its technical importance. Conversely, any renewed weakness would find support initially near $280, then possibly targeting levels around $270 or lower.
Confluence & Conclusion
Multiple technical factors highlight $280 as a critical short-term support level, evidenced by the recent hammer formation, proximity to the plunging Bollinger Lower Band, extreme oversold RSI and KDJ readings, and heightened volume activity surrounding it. A confirmed bounce here might target the psychological $300 resistance and, more significantly, the $310-$315 zone defined by the breakdown point and initial Fibonacci resistance.
However, significant confluence of resistance exists near $338-$350, combining the 38.2% and 50% Fibonacci retracement levels, the estimated 200-day Moving Average, the Bollinger Midline, and the lower boundary of the major breakdown zone from the mid-$380s. Overcoming this formidable zone would be necessary to signal a more substantial recovery or trend reversal. Conversely, a decisive break below $280, especially on sustained volume, would reopen significant downside risks. Given the extreme bearish momentum exhibited, any potential bounce near $280 is viewed as a corrective move within a dominant downtrend unless confirmed by strong bullish price and volume action breaching key resistance levels, particularly those clustered around $340-$350.