Cognizant Stock Plunges 4.6% to $75.47 Extending 3-Day Loss to 5.8%

Cognizant Technology (CTSH) has declined for three consecutive sessions, most recently dropping 4.64% to close at $75.47 on elevated volume, extending its three-day loss to 5.84%. This accelerated selloff prompts a multi-indicator technical assessment.
Candlestick Theory
The recent session formed a long bearish candle closing near its low ($75.47 vs. high $79.19), confirming decisive seller control. This follows a breakdown below the $78.75-$79.90 consolidation zone (June 13-18 lows), which now becomes immediate resistance. Key support appears at the May swing low of $73.27, while sustained trade below $75 invalidates the prior sideways pattern and signals potential continuation downward.
Moving Average Theory
The current price trades well below the 50-day (~$78.50), 100-day (~$79.00), and 200-day (~$78.80) moving averages. Both the 50/100-day and 50/200-day moving averages have completed death crosses recently, confirming a bearish long-term trend structure. The aligned descending MAs create dynamic resistance bands, with any recovery likely to face selling pressure near $78.50.
MACD & KDJ Indicators
The MACD histogram shows accelerating negative momentum, with both signal and MACD lines in bearish territory. Meanwhile, the KDJ oscillator (utilizing 9-period settings) has entered oversold territory (K/D near 20), though without a bullish crossover. This divergence suggests selling exhaustion may be developing, but requires KDJ bullish confirmation to signal reversal potential. MACD's entrenched bearishness currently overrides oversold KDJ readings.
Bollinger Bands
Price has breached the lower Bollinger Band ($77.00) with notable expansion in band width. This volatility breakout signals strong directional conviction to the downside. While a mean-reversion bounce toward the 20-day midline (~$78.50) is statistically probable after such a move, the band expansion suggests any rebound may be limited unless volume confirms accumulation.
Volume-Price Relationship
Volume surged 165% above average during the recent 4.64% decline, underscoring strong capitulation. This high-volume breakdown through support validates the bearish move. Prior consolidation near $80 featured diminishing volume, indicating lack of buyer conviction that foreshadowed the current selloff. Sustained selling pressure is likely unless equivalent bullish volume materializes on recovery attempts.
Relative Strength Index (RSI)
The 14-day RSI has plunged to 29, crossing below the oversold threshold (30). However, RSI reached similar oversold extremes twice in May during downtrends that extended further. The absence of bullish divergence (RSI making higher lows against price lower lows) cautions against premature reversal expectations. While oversold, RSI alone may be insufficient to arrest the downtrend without volume confirmation.
Fibonacci Retracement
Mapping the major swing high ($90.70 on 2025-02-14) to swing low ($67.38 on 2025-04-07), the price has breached the critical 61.8% retracement level ($78.00). This breakdown suggests potential continuation toward the 78.6% level at $73.80. Confluence exists between this Fibonacci target and the May lows ($73.27-$74.00), creating a high-probability support zone where buyers may re-emerge.
Confluence and Divergence
Significant confluence appears in the $73.80-$74.00 area, where Bollinger Band projections, Fibonacci retracement, and horizontal support align. Meanwhile, bearish divergence is noted between MACD (accelerating downside) and KDJ/RSI (oversold but not reversing). This suggests momentum remains skewed downward despite technically exhausted conditions. A confirmed bullish crossover in KDJ alongside volume-backed price action would be needed to shift near-term bias. For now, the weight of evidence suggests further testing of the $74.00 support region is probable.