Check Point Software Drops 4.31% Amid Bearish Technical Breakdown

Check Point Software (CHKP) declined 4.31% to close at 221.26 in the most recent session, marking a significant bearish candlestick on above-average volume and concluding a week of increased volatility. This analysis integrates multiple technical frameworks to assess the current market structure.
Candlestick Theory
The recent price action shows a bearish engulfing pattern on July 10, where the session’s close (221.26) consumed the prior day’s gains amid elevated volume. This reinforces the psychological resistance near 232–233 established in early June, which has capped rallies three times since. Support converges around 218–221, aligned with the July 7 swing low and March 2025 consolidation zone. A sustained break below 218 would invalidate this support, potentially triggering accelerated selling.
Moving Average Theory
CHKP trades below all key moving averages—the 50-day (currently 225.40), 100-day (219.80), and 200-day (205.15)—confirming a bearish trend structure. The 50-day crossed below the 100-day in late June, signaling deteriorating momentum, while the 100-day remains above the 200-day, preserving the longer-term uptrend initiated in early 2024. Current prices are testing the 100-day SMA as resistance, with a sustained rebound above 225 needed to neutralize short-term bearish pressure.
MACD & KDJ Indicators
The MACD histogram shows accelerating negative momentum, with the MACD line (-1.25) entrenched below the signal line (-0.90) since mid-June. Concurrently, the KDJ oscillator registers an oversold reading (K: 22, D: 26, J: 14), though both indicators lack bullish divergence. This confluence suggests strong downward pressure may persist. A KDJ bullish crossover (K > D) with MACD convergence would be required to signal reversal potential.
Bollinger Bands
Bollinger Bands (20-day SMA: 227.85, σ = 3.5) contracted sharply in early July before expanding on the July 10 decline—a volatility breakout confirming bearish resolve. Prices closed near the lower band (222.85), indicating an oversold condition but without immediate recovery signs. The band expansion combined with a close below the lower boundary suggests continuation downside toward 215–218, pending a mean-reversion rebound toward the midline.
Volume-Price Relationship
Volume surged 73% on the July 10 sell-off compared to the 30-day average, validating bearish conviction. This contrasts with lower-volume rebounds in early July, underscoring weak accumulation. Supportive volume during any rebound above 225 would be critical for trend reversal credibility. Current volume profiles highlight distribution near resistance (230+) and absorption at support (218–221).
Relative Strength Index
The 14-day RSI (currently 38) has not breached oversold territory (<30) but has deteriorated from a near-overbought peak (68) in June. Bearish divergence occurred in mid-June when prices made higher highs while RSI formed lower highs, foreshadowing the current correction. While RSI alone does not indicate extreme oversold conditions, its alignment with MACD and volume strengthens the bearish short-term bias.
Fibonacci Retracement
Applying Fibonacci levels to the March–June uptrend (swing low: 213.76 on April 7; swing high: 233.78 on June 6), current prices hover near the 61.8% retracement (221.30). This level coincides with the July 7 low and volume-supported historical base, creating a technical inflection zone. A failure to hold here would expose the 78.6% level (216.50) and psychological support at 215. Conversely, recovery above the 50% retracement (223.75) could signal stabilization.
Confluence and Divergence
Multiple indicators converge bearishly: July 10’s volume-backed candlestick breakdown occurred below key moving averages, MACD momentum deteriorated, and prices breached Bollinger’s lower band. The 221–218 support zone gains technical significance via Fibonacci, historical volume, and candlestick theory. Notably, no bullish divergences exist across oscillators—RSI, KDJ, and MACD align in signaling downward momentum. Short-term structure favors downside continuation unless prices reclaim 225 with supporting volume. The 218 level represents a critical probabilistic pivot: a breakdown would target 208–212, while a rebound above 225 shifts focus to resistance at 230.