Pfizer (PFE) Dips 0.48% as Bearish Signals Intensify Amid Key Support Test

Pfizer (PFE) Technical Analysis

Pfizer (PFE) closed the most recent session at $27.08, down 0.48%, reflecting a bearish continuation from recent price action. The candlestick pattern suggests potential exhaustion in the short-term downtrend, with a key support level forming around $25.48–$26.05 (a prior consolidation zone). A bullish reversal may require a break above the $27.45–$27.80 resistance cluster, which aligns with the 50-day moving average (DMA) at approximately $27.20.

Candlestick Theory

The recent price action displays a bearish "hanging man" formation on October 2nd, signaling potential weakness. Key support levels are identified at $25.48 (9/30 low) and $24.15 (9/18 low), while resistance is clustered near $27.45 (9/30 high) and $28.00 (October 4th high). A bullish "engulfing" pattern could emerge if prices rebound above $27.45 with strong volume, but a breakdown below $25.48 may trigger further bearish momentum.

Moving Average Theory

The 50-DMA (approx. $27.20) currently intersects with the 100-DMA ($26.85), suggesting a neutral bias. The 200-DMA ($26.50) acts as a critical long-term support. Short-term momentum appears range-bound, with the 50-DMA crossing below the 100-DMA in late September, indicating a bearish crossover. However, the 200-DMA remains above the 100-DMA, suggesting the broader trend remains neutral to slightly bullish.

MACD & KDJ Indicators

The MACD histogram has flattened near the zero line, indicating waning momentum, while the KDJ (stochastic oscillator) shows the %K line crossing below the %D line at overbought levels (around 80), signaling a potential bearish reversal. The RSI (discussed below) corroborates this, with readings frequently oscillating between overbought (>70) and oversold (<30) thresholds, suggesting a choppy market.

Bollinger Bands

Volatility has expanded in recent weeks, with prices fluctuating near the upper and lower bands. The 20-day Bollinger Band width (currently ~$1.20) indicates heightened uncertainty. A break above the upper band ($27.80) could confirm bullish momentum, while a drop below the lower band ($26.20) may signal further consolidation.

Volume-Price Relationship

Trading volume has surged during recent pullbacks, particularly on October 1st ($4.05B) and September 30th ($4.11B), validating the bearish breakdown. However, volume has declined on recent rallies, suggesting weak follow-through. A sustainable upmove would require volume expansion above $3.5B, which has not materialized in the past two weeks.

Relative Strength Index (RSI)

The RSI has oscillated between 30–70, with frequent overbought/oversold conditions indicating a lack of directional bias. Recent readings (e.g., 27.45 on 10/1) suggest oversold territory, but caution is warranted given the RSI’s tendency to remain in overbought/oversold zones during range-bound markets. A sustained close above 50 may signal a shift in sentiment.

Fibonacci Retracement

Key Fibonacci levels from the April 2025 high ($30.43) to the September 2025 low ($23.11) include 23.6% ($28.60), 38.2% ($27.85), and 50% ($26.77). Prices are currently consolidating near the 38.2% retracement level, which may act as dynamic resistance. A break above this level could target the 23.6% level ($28.60), while a breakdown would test the 50% level.

Backtest Hypothesis

The backtest strategy of buying PFE when RSI <30 and selling when RSI >70 from 2022 to 2025 yielded underwhelming results, with a CAGR of -0.47% and total return of -0.82%. This poor performance likely stems from the stock’s high volatility (10.05%) and frequent false signals from the RSI, which oscillated between overbought and oversold without clear trend continuation. The strategy’s excess return of -40.60% underscores its ineffectiveness against the benchmark, likely due to whipsaw movements and structural market conditions (e.g., sector-specific pressures or macroeconomic factors) that invalidated RSI-driven signals.