Coherent Shares Plummet 9.64% on Extended Two-Day Slide to 10.80% as Technical Indicators Signal Deepening Downtrend

Coherent (COHR) has experienced a sharp selloff, with a 9.64% decline in the most recent session, extending a two-day losing streak and a cumulative drop of 10.80%. This abrupt move suggests heightened bearish momentum, warranting a detailed technical evaluation across multiple frameworks to assess potential turning points or confirmatory signals for the downtrend.

Candlestick Theory

The recent candlestick formation exhibits a bearish engulfing pattern, where the prior bullish session is entirely consumed by the current bearish candle, signaling a potential reversal in sentiment. Key support levels can be identified at the 2026-01-06 low of $176.99 and the 2025-12-19 low of $174.81, both of which have historically acted as short-term floors. Resistance is clustered near the 2026-01-07 high of $193.59 and the 2026-01-06 high of $194.23, which may now serve as psychological barriers for a potential rebound.

Moving Average Theory

Short-term moving averages (50-day and 100-day) have crossed below the 200-day MA, forming a death cross, which historically signals bearish bias. The 50-day MA currently sits at approximately $185, while the 200-day MA is near $180, indicating a bearish slope. Price has fallen below both the 50-day and 200-day lines, reinforcing the downward trend. A break below $171.80 (2026-01-08 low) would likely trigger further tests of the 2025-11-25 support at $142.46, though this would require a sustained breakdown through intermediate support levels.

MACD & KDJ Indicators

The MACD histogram has contracted, with the MACD line (12,26,9) recently crossing below the signal line, confirming bearish momentum. The KDJ (stochastic oscillator) shows the %K line at 15.7 with %D at 23.3, suggesting oversold conditions, though this may be a false signal due to the rapid sell-off. Divergence between the KDJ lines and price could indicate exhaustion in the downtrend, but confirmation is needed from a bullish crossover or a rebound above $185.

Bollinger Bands

Volatility has expanded as price has moved from the upper band to the lower band over the past two sessions, a classic bearish contraction-to-expansion pattern. The current price of $173.15 sits near the lower band, suggesting potential for a mean reversion trade if volume surges. However, without a clear rebound in volume, this may indicate a continuation of the downtrend rather than a reversal.

Volume-Price Relationship

Trading volume has spiked to $1.05 billion on the most recent session, validating the bearish move and suggesting strong conviction in the sell-off. However, the lack of a corresponding surge in volume during previous support tests (e.g., 2026-01-06) implies waning buyer participation. A follow-through decline with decreasing volume could signal exhaustion, while a surge in volume on a rebound might indicate short-covering or a shift in momentum.

Relative Strength Index (RSI)

The 14-period RSI has fallen to 24, entering oversold territory. While this typically suggests a potential bounce, the RSI has not formed a bullish divergence (price lower low, RSI higher low), which weakens the case for a reversal. A break below 20 without a sharp rebound would likely keep the RSI in bearish territory, with a target of 15–20 as a potential floor.

Fibonacci Retracement

Applying Fibonacci levels from the 2026-01-06 high of $194.23 to the 2026-01-08 low of $171.80, key retracement levels at 38.2% ($183.70), 50% ($183.00), and 61.8% ($182.20) are now critical resistance zones. A failure to hold these levels could lead to a test of the 78.6% retracement at $177.50, aligning with prior support.

Confluence points suggest a high probability of continued bearish pressure if price remains below $185 (50-day MA) and fails to generate a bullish divergence in the KDJ or RSI. However, a rebound above $183.00 with increasing volume could signal a temporary pause in the downtrend. Divergences between the MACD and price action, coupled with oversold RSI readings, hint at potential volatility, though a break below $171.80 would likely accelerate the decline toward $142.46. Investors should monitor volume patterns and Fibonacci levels for confirmation of either continuation or reversal.