PDD Holdings Plunges 7.63% in Three-Day Slide as Bearish Indicators Signal Support Level Breakdown

PDD Holdings has experienced a sharp correction, with a 5.40% drop in the latest session, marking three consecutive down days and a cumulative 7.63% decline over three days. This immediate bearish momentum suggests a potential breakdown below key support levels, particularly the recent low of $110.66 (2026-01-13). Candlestick patterns, such as a series of lower closes and bearish engulfing formations, reinforce the short-term bearish bias. However, the absence of a clear reversal pattern, like a bullish hammer or a morning star, implies the downtrend may persist unless the stock stabilizes near the $107.14 support (2025-12-04).
Moving Average Theory confirms a bearish trend, with the 50-day MA likely below the 200-day MA, indicating a long-term downtrend. The 200-day MA, derived from a year of volatile price action, may act as a dynamic resistance. A break below the 50-day MA would strengthen the bearish case, while a rally above the 100-day MA could signal temporary exhaustion of selling pressure.

MACD & KDJ Indicators highlight divergences. The MACD line has likely crossed below the signal line, confirming bearish momentum, while the KDJ (stochastic oscillator) may show oversold conditions (e.g., %K < 20), suggesting a potential rebound. However, bearish divergence between price and KDJ (lower highs in price vs. higher highs in %K) may delay a reversal.
Bollinger Bands indicate high volatility, with the current price near the lower band, a classic oversold signal. Band contraction observed in late 2025 suggests a period of consolidation before the recent breakout to the downside. If the price remains below the 20-day Bollinger Band, the bearish bias remains intact.
Volume-Price Relationship supports the bearish narrative, with surging volume on down days (e.g., 20.27M shares on 2026-01-13) validating the decline. However, declining volume during subsequent sessions could signal weakening bearish momentum, though current volume levels remain robust, indicating strong conviction in the downtrend.
Relative Strength Index (RSI) has likely entered oversold territory (<30), but caution is warranted as the RSI has not yet formed a bullish divergence with price. A sustained close above the 30 level would be necessary for a reversal signal, though the recent 7.63% drop may require a larger rally to confirm sustainability.
Fibonacci Retracement levels derived from the 2025-04-10 low ($87.97) to the 2025-08-21 high ($123.37) suggest key support at 61.8% ($107.14) and 78.6% ($95.33). A break below $107.14 would target the 78.6% level, aligning with the Bollinger Band contraction zone.
Confluence and Divergences: The bearish alignment of moving averages, MACD, and volume is strong, but RSI and Bollinger Bands suggest oversold conditions. Divergence in the KDJ oscillator may delay a reversal, while Fibonacci support levels could provide temporary respite. A breakdown below $107.14 would likely trigger further declines toward $95.33, but a bullish crossover in RSI or MACD near these levels could signal a counter-trend rally.