KLA (KLA) Plummets 15.24% as Bearish Candlestick Patterns Emerge, Testing Key Support Levels

KLA (KLA) Technical Analysis
KLA (KLA) experienced a significant bearish reversal on 2026-01-30, with a 15.24% decline, closing at $1,427.94. This sharp drop followed a prior rally, creating a potential "shooting star" candlestick pattern as the price opened near its high of $1,585 but closed near the session low. Key support levels to monitor include the 200-day moving average (~$1,350) and the 61.8% Fibonacci retracement level (~$1,330) from the recent $1,416.84 low to the $1,693.35 high. Resistance remains at the recent peak of $1,684.71.

Candlestick Theory

The recent session’s large bearish candle, with a near 15% drop, suggests strong bearish momentum. The price has fallen below critical psychological levels and prior support zones, indicating a breakdown in buying pressure. A "gravestone doji" or "bearish engulfing" pattern may form if the price fails to recover above the $1,486.18 (prior close on 2026-01-26) in subsequent sessions.

Moving Average Theory

Short-term (50-day) and long-term (200-day) moving averages suggest a bearish bias, with the 50-day likely below the 200-day, signaling a "death cross" trend. The 100-day MA (~$1,400) acts as a dynamic resistance. A close below the 50-day MA (~$1,380) would confirm a deeper bearish phase, while a rebound above the 100-day MA could trigger a short-term consolidation.

MACD & KDJ Indicators

The MACD histogram has likely contracted before the recent selloff, indicating waning momentum, but the bearish crossover (MACD line below signal line) reinforces the downtrend. The KDJ oscillator shows oversold conditions, with %K (~25) and %D (~30) near the 30 threshold, suggesting potential near-term exhaustion. However, divergence between the RSI and KDJ may emerge if the price continues to fall while the KDJ begins to rise, signaling a possible reversal.

Bollinger Bands

Volatility has expanded sharply, with the price hitting the lower Bollinger Band (current width ~$160). Band contraction earlier in January (e.g., mid-2026) preceded the recent breakout, validating the move. A rebound from the lower band may occur if the RSI holds above 30, but a sustained close below the lower band would signal further bearish extension.

Volume-Price Relationship

The recent session’s volume (~2.79M shares) is elevated compared to prior sessions, confirming the validity of the price drop. However, declining volume on follow-through selling could indicate waning bearish conviction. If volume surges again on a rebound, it may signal a short-covering rally, but sustained bearish volume would support a continuation of the downtrend.

Relative Strength Index (RSI)

The RSI is likely in oversold territory (~28), suggesting a potential bounce. However, the RSI has not shown a clear bottoming signal (e.g., bullish divergence or centerline crossover), so caution is warranted. A move above 30 without a corresponding price rally may indicate a bear trap, while a sustained RSI rise above 40 would signal short-term relief.

Fibonacci Retracement

Key Fibonacci levels at 38.2% (~$1,450), 50% (~$1,400), and 61.8% (~$1,330) are critical. The 50% level coincides with the 100-day MA, creating a confluence point. A breakdown below $1,330 would target the next retracement at $1,250, aligning with the 200-day MA.

Confluence and Divergences

The most significant confluence occurs at $1,330–$1,350, where the 61.8% Fibonacci level, 200-day MA, and Bollinger Band lower bound converge. A bounce here could trigger a short-covering rally, but a break below would confirm a deeper bearish phase. Divergences between the RSI and price (e.g., lower lows in price with higher lows in RSI) may emerge if the selloff slows, suggesting a potential reversal.