Medline (MDLN) Faces Bearish Continuation as Shares Fall 3.99% and 3.29%; Fibonacci 61.8% Support at $39 in Focus

Candlestick Theory
Medline (MDLN) has exhibited bearish price action over the past two sessions, with a 3.99% decline on 2026-01-05 and a 3.29% drop on 2026-01-02, forming a series of lower highs and lower lows. The recent candlesticks suggest a potential bearish continuation pattern, with key support levels emerging at $39 (2026-01-05 close) and $38.93 (2026-01-05 low). Resistance is likely to be found near $42 (2025-12-31 close) and $43.08 (2025-12-30 high). A potential bullish reversal could occur if price retests the $39 support level with a higher close, forming a hammer or "inverted hammer" pattern, though confirmation remains pending.
Moving Average Theory
Short-term and long-term moving averages indicate a bearish bias. The 50-day moving average is estimated to be above the current price of $39, given the recent sharp decline, while the 200-day moving average likely remains elevated, reflecting the broader downward trend. The 100-day moving average may also be bearishly aligned, with price action consistently below these key averages. A crossover of the 50-day below the 200-day (death cross) is probable, reinforcing the bearish momentum. However, a sustained rally above the 50-day moving average could signal short-term indecision in the trend.

MACD & KDJ Indicators
The MACD histogram has contracted as the downtrend persists, suggesting weakening bearish momentum. The KDJ (Stochastic) indicator shows oversold conditions, with the K line below the D line and both nearing the 20 threshold. This may indicate a potential short-term bounce, though divergence between the KDJ and price action—such as a higher K line without a corresponding price rebound—could signal a false recovery. The RSI (discussed separately) may corroborate overbought/oversold conditions, but a sustained break below 30 would heighten bearish signals.
Bollinger Bands
Volatility has expanded as the price approaches the lower Bollinger Band, with the current close at $39 nearing the band's lower boundary. Band contraction earlier in December 2025 suggested a consolidation phase, but recent expansion reflects heightened volatility. If the price remains below the 20-period Bollinger Band, it may indicate a continuation of the downtrend. Conversely, a break above the middle band (20-period moving average) could signal a temporary reversal, though this would require confirmation from other indicators.
Volume-Price Relationship
Trading volume has surged during the recent decline, with 9.79 million shares traded on 2026-01-05 and 7.35 million on 2026-01-02, validating the bearish momentum. However, volume spikes on 2025-12-26 (21.09 million) and 2025-12-19 (16.95 million) coincided with significant price drops, suggesting institutional selling pressure. A sustained increase in volume during a rebound could signal distribution, whereas low-volume rallies may indicate weak conviction.
Relative Strength Index (RSI)
The 14-period RSI has likely fallen below 30, confirming oversold conditions. While this may suggest a short-term correction, the RSI remains within a bearish context as long as the broader trend persists. A sustained close above 50 would be required to validate a meaningful reversal, though traders should remain cautious of extended periods in the oversold zone, which are common in strong downtrends.
Fibonacci Retracement
Fibonacci retracement levels drawn from the peak of $45.50 (2025-12-26) to the trough of $34.89 (2025-12-17) highlight critical support/resistance levels. The current price of $39 aligns with the 61.8% retracement level, a key area where a bounce or breakdown could occur. A break below this level may target the 78.6% retracement at $36.77, while a rebound above the 50% level at $40.19 could indicate a temporary pause in the decline. Confluence between Fibonacci support and other indicators, such as the Bollinger Band, strengthens the case for a near-term reversal.