Lumentum Shares Plunge 4.65% as Death Cross and Bearish Patterns Emerge, RSI Hits Oversold, $330–$340 Support Looms

Lumentum Holdings (LITE) has experienced a sharp correction, with a 4.65% decline in the most recent session, extending a two-day loss of 5.89%. This bearish momentum is reflected in candlestick patterns, where a bearish engulfing formation and shooting star configurations suggest exhaustion in the uptrend. Key support levels are emerging around the $330–$340 range, with prior resistance at $390–$400 now acting as a short-term ceiling. The RSI (14) has dipped below 30, indicating oversold conditions, though caution is warranted as prolonged overbought/oversold states can persist in strong trends.

Moving Average Theory reveals a bearish alignment: the 50-day MA has crossed below the 200-day MA, forming a death cross, while the 100-day MA remains in a downtrend. Short-term momentum is confirmed by the 50-day MA (currently at ~$360) lagging behind the price (at ~$372.61), suggesting continued bearish bias.

Confluence with Fibonacci retracement levels highlights the 38.2% retracement at ~$345 as a critical near-term support zone.
MACD & KDJ indicators reinforce the bearish narrative. The MACD histogram has turned negative, with the fast line crossing below the signal line, signaling weakening bullish momentum. The KDJ oscillator shows stochastic divergence, as the %K line fails to confirm lower lows in price, hinting at potential short-term exhaustion. However, RSI’s oversold reading (~28) may act as a temporary floor, though a rebound without volume confirmation risks a false signal.
Bollinger Bands demonstrate expanding volatility, with price testing the lower band (~$364). This contraction-to-expansion pattern suggests heightened short-term uncertainty, and a break below the $364 level could trigger a test of the 200-day MA (~$350) as a next target.
Volume-Price Relationship analysis shows elevated selling pressure, with average daily volume surging to ~3M shares (vs. ~2.5M in the prior month). While this validates the recent decline, diminishing volume on follow-through bearish candles may signal waning conviction. Divergence between volume and price (e.g., declining volume on lower closes) could precede a reversal, but this remains unconfirmed.
RSI interpretation underscores the oversold condition, with the indicator at 28. However, historical context shows LITE has remained in oversold territory during prolonged declines, so this should be viewed as a warning rather than a reversal signal. A sustained close above $385 (50-day MA) would be necessary to reinvigorate bullish sentiment.
Fibonacci Retracement levels intersect with key moving averages and prior support/resistance zones. The 50% retracement at ~$365 aligns with the 50-day MA, creating a confluence point where a short-term bounce is probable. A breakdown below $345 (38.2% level) would validate a deeper correction toward the 61.8% retracement at ~$330.
Confluence and Divergences: The bearish alignment of MAs, MACD, and candlestick patterns creates a high-probability scenario for continued downside. However, divergences in the KDJ and potential RSI oversold bounce introduce ambiguity. Traders should monitor volume dynamics and the 50-day MA crossover as critical junctures.
In summary, LITE faces a structurally bearish setup with multiple indicators pointing to extended weakness. While technical tools like RSI and Bollinger Bands offer potential short-term support levels, the broader trend remains intact unless a high-volume reversal emerges above $385.