Seagate Technology Stock Plunges 1.58% in Two Sessions as Technical Indicators Signal Bearish Bias

Seagate Technology (STX) has experienced a two-day consecutive decline, with a 1.58% drop in the last two sessions. The recent price action suggests a potential bearish bias, but the magnitude of the decline and volume dynamics will be critical in determining the sustainability of this trend.

Candlestick Theory

The recent bearish momentum is evident in the two-day consecutive close below key resistance levels. A key support level appears to form around the $236.06–$236.13 range (near the 2025-09-30 and 2025-09-23 lows), which could act as a short-term floor. A breakdown below this level may trigger a retest of the $213.01–$217.51 range (2025-09-17 to 2025-09-26 lows), with a potential target at $195.99–$196.81 (2025-09-11 to 2025-09-12 lows). However, bullish reversal signals like a “bottoming star” or “bullish engulfing” pattern near critical support levels could signal a short-term rebound.

Moving Average Theory

The 50-day, 100-day, and 200-day moving averages (calculated from the 2025-04-03 to 2025-10-03 data) indicate a bearish trend. The 50-day MA is likely below the 200-day MA, confirming a downtrend. A potential short-term bounce may occur if the price reclaims the 50-day MA, but a sustained break below the 100-day MA would reinforce bearish momentum. Traders should monitor the 252.79–254.74 range (2025-10-02 to 2025-10-03 highs) as a critical resistance cluster.

MACD & KDJ Indicators

The MACD histogram has been contracting, indicating weakening bearish momentum, while the KDJ oscillator shows the J line dipping below the K line—a potential sell signal. However, the RSI hovering near 30 suggests oversold conditions, creating a divergence between momentum indicators and price. This divergence may hint at a short-term rebound, but confirmation via a bullish crossover in the KDJ or a MACD line crossing above the signal line is necessary.

Bollinger Bands

Volatility has expanded recently, with the price trading near the lower Bollinger Band. This suggests oversold conditions, but the widening bands indicate increased uncertainty. A break above the upper band would signal a potential reversal, while a sustained close below the lower band could trigger a deeper correction. The 236.06–258.3999 range (2025-09-30 to 2025-10-01) represents a key volatility contraction zone to monitor for potential breakouts.

Volume-Price Relationship

Trading volume has surged during recent declines (e.g., 9.75 million shares on 2025-10-01), confirming the bearish trend. However, the volume has slightly tapered in the last two sessions (4.916 million on 2025-10-03), which may indicate waning bearish conviction. A surge in volume during a potential rebound would strengthen the case for a short-term bounce, while a continuation of low-volume selling could prolong the downtrend.

Relative Strength Index (RSI)

The RSI is near 30, signaling oversold conditions. While this typically suggests a potential bounce, the RSI has remained in oversold territory for extended periods during the 2025-04–2025-09 downtrend, indicating a strong bearish bias. A close above 50 would suggest a short-term recovery, but a failure to break above 60 may confirm the continuation of the downtrend.

Fibonacci Retracement

Key Fibonacci levels derived from the 2025-04-03 ($91.03) to 2025-09-01 ($258.3999) move include 61.8% at $213.0554 (2025-09-26 low) and 78.6% at $251.65 (2025-10-03 low). A retest of the 61.8% level could trigger a short-term bounce, but a breakdown below the 78.6% level would target the 100% extension at $295.74 (not yet reached).

Backtest Hypothesis

A backtest of a strategy buying STX when RSI < 30 and selling when RSI > 70 from 2022 to 2025 underperformed the benchmark by 63.11%, with a Sharpe Ratio of -0.18. This poor performance aligns with the observed bearish bias and legal uncertainties (e.g., export control investigations). The strategy’s failure highlights the importance of incorporating fundamental risks alongside technical signals. Future iterations should incorporate volatility filters (e.g., Bollinger Band width) and Fibonacci retracement levels to improve signal timing.