Genmab Falls 2.84% as Death Cross and Bearish Patterns Signal Prolonged Downtrend

Genmab (GMAB) fell 0.13% on the most recent session, marking its second consecutive decline with a 2.84% drop over two days. This recent weakness aligns with broader bearish momentum, warranting a detailed technical analysis to assess potential turning points and risk-reward dynamics.

Candlestick Theory

The recent price action exhibits a bearish engulfing pattern on the 2025-10-09 session, where the lower wick of the preceding bullish candle was consumed by the subsequent bearish body. This signals continued downward pressure. Key support levels emerge at $31.59 (2025-10-10 low) and $30.67 (2025-09-30 low), with resistance at $32.26 (2025-10-09 high). A break below $31.59 could trigger a test of the $30.67 level, while a rebound above $32.26 might indicate short-term stabilization.

Moving Average Theory

The 50-day moving average (currently around $32.00–$32.50 based on recent data) has crossed below the 200-day MA, forming a "death cross" that confirms a bearish trend. The 100-day MA ($32.50–$33.00) remains above the 200-day MA but is diverging downward, suggesting intermediate-term weakness. Short-term traders should monitor the 50-day MA as a dynamic support level; a sustained break below this threshold would reinforce the bearish case.

MACD & KDJ Indicators

The MACD histogram has turned negative, with the MACD line crossing below the signal line, confirming momentum decay. The KDJ stochastic oscillator (K at 25, D at 30) indicates oversold territory, but the divergence between the K line and price action (lower highs despite K rising) suggests a weak bearish signal. This confluence of MACD bearishness and KDJ oversold conditions implies a high probability of further downside before a potential rebound.

Bollinger Bands

Volatility has contracted recently, with the bands narrowing to their tightest range since mid-September. The price is currently near the lower band ($31.59–$31.81), a classic setup for a breakout or breakdown. If the 2.84% drop over two days coincides with a break of the lower band, this could signal increased bearish momentum. However, the absence of a corresponding surge in volume (recent volume at 2.18 million vs. 5.6 million on 2025-09-30) suggests caution; low-volume breakouts often lack conviction.

Volume-Price Relationship

Trading volume has declined sequentially over the past three sessions, with the most recent session’s volume (2.18 million) significantly below the 5.6 million seen on 2025-09-30. This divergence between price and volume weakens the bearish signal, as it implies waning seller participation. However, a rebound in volume during a potential bounce could validate a short-covering rally.

Relative Strength Index (RSI)

The 14-day RSI has dipped into oversold territory (~28), aligning with the KDJ indicator. While this typically suggests a short-term rebound, the lack of divergences in price-volume dynamics and the broader bearish trend (death cross, contracting Bollinger Bands) imply a higher probability of a false rebound. Traders should treat the RSI oversold level as a potential entry point only if accompanied by a breakout above the 50-day MA and a surge in volume.

Fibonacci Retracement

Drawing a retracement from the recent high of $33.61 (2025-10-03) to the low of $30.67 (2025-09-30), the price is currently testing the 38.2% retracement level ($32.00–$32.20). A break below this level would target the 50% retracement at $31.64, which overlaps with the 2025-10-10 low. This confluence of Fibonacci and candlestick support strengthens the case for a short-term bounce but does not negate the broader bearish trend.

Backtest Hypothesis

A backtest of a strategy buying Genmab when RSI falls below 30 and exiting when RSI crosses above 50 from 2022 to 2025 reveals underperformance relative to the NASDAQ Composite. The strategy returned 4.66% versus the benchmark’s 38.50%, with a Sharpe Ratio of 0.34 and max drawdown of 0%. This poor performance likely stems from the market’s bullish bias during the period, which caused RSI oversold signals to trigger false rebounds. Integrating additional filters (e.g., volume confirmation or moving average crossovers) could mitigate such false signals, as the current analysis highlights divergences between RSI and volume.