KLA Plunges 8.42% to $874.94 as Technicals Signal Breakdown Below Key Support

KLA experienced a significant decline in the latest session, dropping 8.42% to close at $874.94 on elevated volume of 2.06 million shares. This sharp pullback interrupts a multi-month uptrend and warrants examination through multiple technical lenses.
Candlestick Theory
The latest session formed a long bearish candle closing near its low ($873.16 low vs $874.94 close) after rejecting the $924–$959 resistance zone. This confirms distribution near the yearly high, with a breakdown below the $883–$886 support cluster (August 5–6 lows). Next support appears near $834–$850 (June 2025 consolidation zone), while resistance now materializes at $910–$915 (recent breakout level).
Moving Average Theory
The price has breached the 50-day moving average (approximated at $910) decisively. Bearish momentum is intensifying as the 50-day trends flat, while the 100-day ($865) and 200-day ($765) maintain upward slopes. A potential death cross looms if the 50-day crosses below the 100-day, which would signal intermediate-term trend deterioration.
MACD & KDJ Indicators
MACD exhibits a bearish crossover with its signal line below the zero line, confirming negative momentum acceleration. KDJ readings suggest oversold conditions (K-line estimated below 20), yet persistent downward slope in the %D-line indicates ongoing selling pressure. No divergence is observed, suggesting no immediate reversal signal despite stretched conditions.
Bollinger Bands
Price has plunged below the lower Bollinger Band ($900 threshold), indicating an extreme volatility expansion. The bandwidth has widened significantly, typical of panic selling events. Such deviations often precede short-term mean-reversion bounces, but sustainability requires reconquering the 20-day midline (near $920).
Volume-Price Relationship
The breakdown occurred on the highest volume since April 2025, validating bearish conviction. This contrasts with declining volume during the late-July to mid-August rally—a negative divergence. Distribution patterns appear at highs, while capitulation volume at current levels suggests sellers may be exhausting near-term.
Relative Strength Index (RSI)
The 14-day RSI has plunged to approximately 28, entering oversold territory. However, this follows an overbought reading (>70) just four sessions prior, reflecting extreme volatility. While technically oversold, the lack of bullish divergence and vertical descent implies continued vulnerability before stabilization.
Fibonacci Retracement
From the swing low of $576.53 (April 4, 2025) to the high of $955.41 (August 14, 2025), key retracement levels are established. The current price sits between the 23.6% ($866) and 38.2% ($810) retracements. Confluence exists near $866, aligning with the June 2025 consolidation low and long-term volume support—making this a critical level to monitor for potential stabilization.