On Holding Stock Plunges 16% Below Key Moving Average As Bearish Signals Intensify

Candlestick Theory
On Holding's recent price action shows a bearish continuation pattern, with three consecutive red candles (September 24–26) closing near session lows. The September 26 candle closed at $42.47 after testing resistance near $44.32 (high) and breaking below the September 22 swing low of $44.65. This breakdown suggests renewed selling pressure, with immediate support at $42.46 (September 26 low) and psychological support at $42. Resistance now aligns with the 50-day moving average (~$49.50) and the recent consolidation zone between $44.50–$45.90. A close below $42.46 may trigger further declines toward the August 14 low of $44.02.
Moving Average Theory
The 50-day, 100-day, and 200-day moving averages exhibit a bearish alignment ("death cross" formation). The 50-day MA (~$49.50) crossed below the 100-day MA (~$52) in late August, followed by both trending below the 200-day MA (~$54). The current price ($42.47) trades 16% below the 50-day MA, confirming a strong downtrend. This structure underscores persistent selling pressure, with the moving averages acting as dynamic resistance. A sustained reversal would require a decisive break above the 50-day MA.
MACD & KDJ Indicators
The MACD (12,26,9) remains in negative territory, with the signal line hovering below the zero line since mid-September. The September 26 MACD histogram printed deeper negative values, signaling accelerating bearish momentum. KDJ metrics (particularly %K and %D) are oversold (below 20) but lack bullish divergence. While oversold conditions typically precede reversals, the absence of bullish crossover signals suggests downward momentum may persist. Confluence with volume patterns (higher volume on down days) reinforces bearish conviction.
Bollinger Bands
Bollinger Bands (20-day) expanded sharply during the September 24–26 selloff, reflecting heightened volatility. Price breached the lower band ($43.20) on September 26 but closed slightly above it, indicating tentative support. The bandwidth expansion implies ongoing directional momentum. Historically, such breaks preceded short-term bounces (e.g., August 22), but the dominant downtrend and weak volume recovery diminish reversal prospects. A close above the 20-day MA ($45.80) is needed to neutralize bearish bias.
Volume-Price Relationship
Recent declines were validated by rising volume: September 25 volume (7.66M shares) surged 178% above the 30-day average, confirming distribution. The September 26 session saw 5.37M shares traded, sustaining above-average activity. Conversely, minor rallies (e.g., September 19–22) occurred on below-average volume, signaling weak buying interest. This divergence—high volume on down days versus low volume on up days—suggests institutional selling outweighs retail accumulation, increasing downside vulnerability.
Relative Strength Index (RSI)
The 14-day RSI (36.5) approaches oversold territory but remains above the critical 30 threshold. While RSI diverged bullishly during August’s decline (higher lows vs. price), no such divergence exists in the current selloff. The indicator’s failure to breach 30 despite three consecutive down days warns against premature reversal calls. Historically, ONON’s RSI has lingered in 30–45 zones during extended downtrends (e.g., April–May 2025). A sustained reversal would require RSI reclaiming 50 alongside price confirmation.
Fibonacci Retracement
Applying Fibonacci to the July 22 high ($52.78) and September 26 low ($42.46), key retracement levels are $45.23 (23.6%), $47.62 (38.2%), and $48.62 (50%). The current price sits below all retracement levels, indicating bearish dominance. Notably, the 23.6% level aligns with September 22 resistance ($45.76), reinforcing its technical significance. A rebound above $44.32 (recent high) could target $45.23, but confluence with descending moving averages at $47–$49 suggests heavy resistance. Failure to hold $42.46 may extend declines toward the 161.8% projection at $39.80.
Conclusion
Multiple technical indicators align bearishly for On Holding. The breakdown below $44.50 support (reinforced by volume confirmation), death cross formation, and absence of bullish divergence in RSI/MACD suggest continued downside risk. Confluence at $44–$45 from Bollinger resistance, Fibonacci levels, and moving averages creates a high-probability rejection zone. While oversold conditions may spark technical rebounds, sustained recovery requires a close above $45.23 (23.6% Fib) with volume expansion. Until then, traders should monitor the $42.46 support breach, which could accelerate selling toward $40. The current technical posture favors defensive positioning or short-term contrarian trades with tight risk controls.