Cummins Falls 0.88% to 411.78 After Rejection at Key 420 Resistance

Cummins (CMI) declined 0.88% in the latest trading session (2025-09-17), closing at 411.78 after testing key psychological resistance near 420. The following technical analysis evaluates this price action within the context of broader market structure and indicator confluence.
Candlestick Theory
Recent candlestick patterns reveal notable tension around the $420 level. The 2025-09-17 session formed a bearish "shooting star" pattern with a long upper wick (high: 420.75, close: 411.78), indicating rejection at the $420 resistance zone. This follows a consolidation phase between $408-$416 over the prior three sessions. Support is emerging near $408 (tested repeatedly in mid-September), while resistance remains firm at $420 – a level that has capped advances since mid-August. The shooting star formation at resistance suggests near-term bearish momentum.
Moving Average Theory
The moving average configuration reflects a bullish primary trend but weakening intermediate momentum. The 50-day MA (~390) and 100-day MA (~375) both trade above the 200-day MA (~355), confirming a long-term uptrend. However, the latest close (411.78) is testing the 20-day MA near $412 after breaking below it. Failure to hold this level could trigger a deeper pullback toward the 50-day MA. The flattening slope of the 50-day MA indicates decelerating intermediate bullish momentum despite the intact long-term trend structure.
MACD & KDJ Indicators
The MACD histogram shows weakening bullish momentum, with both the MACD line and signal line beginning to converge near neutral territory. The KDJ oscillator is more decisive: %K (39) recently crossed below %D (42) from overbought territory (>80 a week prior). This bearish crossover, occurring near the $420 resistance, suggests waning upward momentum. While not yet oversold, the downward trajectory of both lines indicates increasing selling pressure.
Bollinger Bands
Volatility contracted notably in early September (bandwidth narrowed 15%), preceding the sharp breakout to $420. Price now sits near the midpoint of the bands after testing the upper band at $420. The rejection from the upper band, coupled with expanding volatility (bandwidth increased 8% on 2025-09-17), signals potential near-term mean reversion. A sustained break below the midline ($410) would target the lower Bollinger Band near $395.
Volume-Price Relationship
Volume patterns undermine recent price advances. The 2.66% rally on 2025-09-10 occurred on below-average volume (846k vs. 30D avg: 897k), suggesting weak conviction. Subsequent new-high attempts saw declining volume, culminating in the 2025-09-17 selloff at 1.05M shares – the highest volume in seven sessions. This distribution pattern (high volume on down days) near resistance signals sustainability concerns for the uptrend.
Relative Strength Index (RSI)
The 14-day RSI (58) has retreated from near-overbought territory (69 on 2025-09-15) but remains above neutral. While no longer warning of extreme overextension, the divergence between price ($420 high) and RSI (lower high) suggests weakening momentum. RSI support now converges with price support at the 45-50 zone.
Fibonacci Retracement
Applying Fibonacci to the July-September rally (swing low: $356.92 on 2025-08-01, swing high: $420.75), key retracement levels provide downside targets. The 23.6% level at $408 has already been tested repeatedly. More significant support emerges at the 38.2% retracement ($402), coinciding with the 50-day MA and mid-August consolidation. The 50% level at $389 offers the next major confluence zone, aligning with the 100-day MA and July’s resistance breakout point.
Confluence & Divergence Observations
Strong confluence exists at the $420 resistance zone, where Bollinger Band rejection, shooting star formation, bearish KDJ crossover, and negative RSI divergence align. Divergence appears in volume dynamics: the recent higher price highs weren’t confirmed by expanding volume, undermining sustainability. However, significant support confluence near $402 (38.2% Fibonacci, 50-day MA, prior swing highs) provides a critical defense level. A breach below $408 would increase the probability of testing this pivotal $402 region, potentially catalyzing a broader correction toward $389. Traders should monitor these confluence zones for directional confirmation.