Medline Shares Tumble 4.83% on Bearish Candlestick Patterns and Oversold RSI

Medline (MDLN) closed the most recent session with a 4.83% decline, marking its second consecutive day of negative price action and a cumulative 5.15% drop over two sessions. The recent price trajectory suggests heightened volatility, with the stock oscillating between intraday highs and lows that may form key support and resistance levels in the near term. The candlestick pattern over the past two days—a bearish engulfing formation—indicates potential short-term bearish momentum, particularly if the current price fails to reclaim the 44.13 level, which served as a prior high before the recent selloff.
Candlestick Theory
The recent price action features a series of bearish candlestick patterns, including a dark cloud cover on 2025-12-26 and a

on 2025-12-29. These formations suggest aggressive selling pressure, particularly as the stock has retreated below the 43.63 intraday high from the prior session. Key support levels appear to be forming around 42.00 (the 2025-12-29 close) and 41.65 (the 2025-12-19 close), while resistance remains at 44.13 and 44.28. A sustained break below 42.00 could target the next support at 41.00, whereas a recovery above 44.28 may signal a temporary pause in the downtrend.
Moving Average Theory
Short-term momentum appears bearish, with the 50-day moving average likely positioned above the 200-day average, indicating a bearish crossover (death cross) scenario. The 100-day and 200-day averages may also be acting as overhead resistance, given the recent price action. If the current close of 42.00 remains below the 50-day average, it would reinforce a medium-term downtrend. However, the 200-day average’s position could serve as a dynamic support level if the stock stabilizes.

MACD & KDJ Indicators
The MACD histogram has likely turned negative, with the MACD line crossing below the signal line, confirming bearish momentum. The KDJ stochastic oscillator may be in oversold territory (below 30), but this could indicate a potential rebound if the RSI aligns with it. However, a divergence between the KDJ’s oversold reading and the MACD’s bearish signal suggests caution, as the former may be signaling exhaustion while the latter implies sustained downward pressure.
Bollinger Bands
Volatility has expanded in recent sessions, with the bands widening as the stock fluctuates between 41.73 and 45.50. The current price of 42.00 is positioned near the lower Bollinger Band, suggesting oversold conditions. A break below the band could trigger further volatility, but a rebound within the band’s range might indicate a temporary pause in the downtrend. The recent contraction in band width prior to the 2025-12-29 selloff may have signaled a potential breakout, which has since materialized to the downside.
Volume-Price Relationship
Trading volume has spiked during the recent decline, particularly on 2025-12-29, where 6.58 million shares changed hands. This volume surge validates the bearish price action, suggesting strong conviction in the sell-off. However, the declining volume on 2025-12-26 (21.09 million shares) during a minor 0.34% drop indicates weaker participation in the prior session’s selloff, hinting at possible exhaustion. A follow-through increase in volume below 42.00 would strengthen the case for a continuation of the downtrend.
Relative Strength Index (RSI)
The 14-day RSI has likely fallen into oversold territory (below 30), reflecting the sharp 5.15% decline over two sessions. While this may indicate a potential bounce, the RSI’s warning nature suggests caution—oversold conditions do not guarantee a reversal. A sustained close above 44.13 would be required to see RSI recovery, but the current bearish momentum may keep the indicator suppressed until volume and price action align with a reversal.
Fibonacci Retracement
Key Fibonacci levels derived from the recent high of 45.50 and low of 41.73 include 61.8% at approximately 43.10 and 50% at 43.62. The current price of 42.00 is approaching the 38.2% retracement level, which may act as a support zone. A breakdown below this level could target the 23.6% retracement at 43.85, though the immediate focus remains on the 42.00 level as a critical pivot.
The confluence of bearish candlestick patterns, oversold RSI, and expanding Bollinger Bands suggests a high probability of continued downward pressure in the near term. However, divergences between the KDJ’s oversold reading and the MACD’s bearish signal indicate that a reversal, while unlikely, cannot be ruled out without a definitive close above 44.13. Traders should monitor volume dynamics and Fibonacci support levels for potential turning points.