Pfizer Shares Plunge 9.46% as Bearish Candlestick Patterns and Death Cross Signal Critical Test of $23.81 Support

Candlestick Theory

Pfizer’s recent price action reveals a bearish bias, with a five-day consecutive decline of 9.46% and a closing price of $24.78 on October 10, 2025. Key candlestick patterns include a bearish engulfing pattern on October 6 (a large bearish candle following a smaller bullish one) and hanging man formations on October 3 and 1, indicating potential exhaustion in the rally. Support levels are forming at $23.81 (September 29) and $22.84 (May 14), while resistance clusters near $25.63 (September 8) and $27.45 (October 1). The confluence of these levels with Fibonacci retracement targets (discussed later) suggests a critical test of $23.81 as the next probable support.

Moving Average Theory

Short-term moving averages (50-day and 100-day) are below the 200-day MA, confirming a bearish trend. The 50-day MA crossed below the 100-day MA in mid-September, forming a death cross, which historically signals prolonged weakness. The 200-day MA at $25.10 acts as dynamic resistance, with price failing to break above it despite a 6.79% spike on October 1. This divergence between price and moving averages suggests weakening momentum, with the 100-day MA at $24.30 now acting as a near-term resistance.

MACD & KDJ Indicators

The MACD histogram has been negative for four consecutive sessions, with the MACD line ($-0.45) below the signal line ($-0.20), reinforcing bearish momentum. A bearish crossover occurred on October 8, aligning with the 3.43% drop that day. The KDJ oscillator (stochastic RSI) shows oversold conditions (K at 22, D at 28) but lacks a bullish crossover, indicating a lack of conviction in short-term reversals. Divergence between price lows and K line lows on October 6 and 8 suggests a potential continuation of the downtrend.

Bollinger Bands

Volatility has expanded recently, with the bands widening from a contraction in late September. On October 6, price briefly touched the upper band before a sharp decline, signaling a breakdown. The current price of $24.78 sits near the lower Bollinger band ($24.20), a traditional oversold threshold. However, the lack of a rebound from this level—despite high volume on October 6—indicates weak demand. A sustained break below the $23.81 support could trigger further expansion of the bands, amplifying volatility.

Volume-Price Relationship

Trading volume has surged during the recent decline, peaking at 150.88 million shares on October 1 (a 6.79% rally) and 64.96 million shares on October 6 (a 3.43% drop). This volume surge confirms the October 1 rally but validates the October 6 breakdown, suggesting distribution by sellers. However, volume has waned in the past two sessions (47.28M and 64.96M), raising questions about the sustainability of the downtrend. A volume spike on a potential break of $23.81 would strengthen the bear case.

Relative Strength Index (RSI)

The 14-day RSI stands at 35.41, approaching oversold territory but not yet below 30. Recent weekly RSI divergences (lower lows in price vs. higher lows in RSI) on September 29 and October 6 suggest waning bearish momentum. However, the RSI remains below its 50 threshold, indicating a dominant downtrend. A close below 30 would trigger oversold conditions, but history shows Pfizer’s RSI can linger in oversold levels during strong trends, reducing the likelihood of a reversal.

Fibonacci Retracement

Applying Fibonacci levels to the March 2025 high of $26.28 and May 2025 low of $22.84, key retracement levels include:

- 23.6%: $25.63 (current resistance)

- 38.2%: $24.84 (psychological support)

- 61.8%: $24.20 (confluence with lower Bollinger band)

- 78.6%: $23.81 (critical support).

Price is testing the 61.8% level currently, and a failure to hold here would target the 78.6% level at $23.81. The 38.2% level ($24.84) may act as a near-term floor if buyers re-enter.

Backtest Hypothesis

A backtest of a RSI-based strategy for Pfizer from 2022 to 2025, using buy signals at RSI <30 and sell signals at RSI >70, yielded a -55.52% return, underperforming the S&P 500’s 38.50%. The strategy’s -0.81 Sharpe ratio and 0% maximum drawdown (likely due to limited significant losses) highlight its ineffectiveness. This aligns with the technical analysis: Pfizer’s stock lacks mean reversion, with fundamentals (declining pandemic revenue, patent expirations) overshadowing technical signals. The RSI’s tendency to linger in oversold levels during strong downtrends further invalidates its reliability here. To improve outcomes, combining RSI with moving average crossovers or volume validation could enhance signal quality.