Fortinet Falls 3.75% as Technical Indicators Signal Bearish Momentum on 2025-12-17

Fortinet (FTNT) experienced a 3.75% decline in the most recent session, closing at $79.38 on 2025-12-17. This price action, combined with the preceding week’s mixed momentum and volatility, warrants a detailed technical analysis across multiple frameworks to assess potential near-term dynamics and confluence points.
Candlestick Theory
The recent bearish candlestick pattern on 2025-12-17, characterized by a long lower shadow and a close near the session low, suggests short-term bearish conviction. This aligns with a potential bearish engulfing pattern relative to the prior day’s indecisive range. Key support levels are emerging at $79.38 (recent low) and $77.17 (prior low on 2025-11-21), while resistance is clustered near $81.13 (2025-12-16 high) and $82.47 (2025-12-16 close). A breakdown below $77.17 may target the next major support at $75.31 (2025-11-06 low), though bullish reversal cues near $77.17 could suggest a short-term rebound.
Moving Average Theory
The 50-day moving average (calculated from the 2025-09-02 close of $101.78 to the 2025-12-17 close) is likely below the 200-day MA, indicating a bearish trend. The 100-day MA, currently around $93–$94, acts as a dynamic resistance. The price’s distance from the 200-day MA (~$98) suggests a potential for further downside before the trend may consolidate. A crossover of the 50-day MA above the 200-day MA would signal a bullish reversal, but this appears unlikely in the immediate term given the current trajectory.
MACD & KDJ Indicators
The MACD histogram is contracting, reflecting weakening bearish momentum, with the MACD line hovering near zero. The KDJ (stochastic oscillator) shows the %K line dipping below 20 (oversold territory), while the %D line lags, hinting at a potential near-term bounce. However, a divergence between the KDJ and price action—where the %K line fails to rise despite a rally—could signal a false recovery. The RSI, at ~28, reinforces the oversold condition, though caution is warranted as the stock has historically traded in overbought/oversold extremes during volatile phases.
Bollinger Bands
Bollinger Bands have expanded significantly due to elevated volatility, with the 20-day SMA around $86–$87. The current price of $79.38 sits near the lower band, suggesting a potential short-term rebound. However, if the bands contract and the price remains below the midline, it may indicate a continuation of the downtrend. A break above the upper band would require a sharp reversal, which is less probable without a catalyst.
Volume-Price Relationship
Trading volume surged to 9.27 million shares on the 3.75% decline, validating the bearish move. However, volume has been inconsistent over the past two weeks, with spikes during sharp declines (e.g., 12.2 million on 2025-11-06) and lower volumes during consolidation. This pattern suggests that while the recent drop is supported by liquidity, a lack of follow-through volume during rallies (e.g., the 4.5 million shares on 2025-12-11) may limit upside potential.
Relative Strength Index (RSI)
The 14-day RSI is approximately 28, indicating oversold conditions. However, given the stock’s recent volatility (e.g., a 22% drop on 2025-08-07), the RSI has frequently oscillated beyond traditional thresholds. A closing above $81.13 may push the RSI above 30, but a sustained break above $83.50 (a prior key level on 2025-12-09) would be required for a meaningful bullish signal. Caution is advised as the RSI’s warning nature is amplified during extended trends.
Fibonacci Retracement
Applying Fibonacci levels between the recent high of $114.57 (2025-02-19) and low of $75.31 (2025-11-06), key retracement levels at $93.20 (38.2%), $89.44 (50%), and $85.68 (61.8%) are critical. The current price near $79.38 suggests a potential target at $85.68 if a retracement occurs. A breakdown below $75.31 would extend the correction to $72.83 (2025-08-07 low), though this scenario is less probable without additional bearish confirmation.
Confluence and Divergences
The confluence between the RSI oversold condition, KDJ stochastic divergence, and Bollinger Bands near the lower band suggests a moderate probability of a short-term rebound to test $81.13. However, divergences between the MACD and price action—where the histogram fails to expand during rallies—indicate weakening bullish momentum. The moving averages and Fibonacci levels reinforce a bearish bias, with the 200-day MA acting as a key hurdle for any sustained recovery.