On Semiconductor Rebounds 2.67% After 7% Plunge Amid Technical Support Test

On Semiconductor shares advanced 2.67% on July 25, 2025, closing at $56.92, recovering some ground after a sharp 7% decline the previous session. This price action highlights ongoing volatility, warranting a detailed technical assessment using the requested framework.
Candlestick Theory
The most recent candle formed a bullish engulfing pattern after the preceding large red candle on July 24th. This suggests potential short-term bullish reversal sentiment near the $55.42 support level, which has been tested multiple times in late July. Resistance is evident near $59.50-$60.50, a zone where price struggled in mid-July and around the 200-day moving average. The late April swing high of $45.47 and the 2024 peak of $80.08 provide additional long-term reference points for key support/resistance levels.
Moving Average Theory
The 50-day moving average (~$58.20) has crossed below both the 100-day (~$59.80) and 200-day MA (~$60.10), confirming a bearish intermediate trend. Price is currently trading below all three major moving averages, indicating persistent downward pressure. This alignment reflects a weakening trend, though the July 25th bounce shows initial signs of testing this bearish structure near the $55 support confluence.
MACD & KDJ Indicators
MACD remains in negative territory with the signal line below zero, though the histogram shows marginal contraction in bearish momentum after the July 24th plunge. The KDJ oscillator (especially the %K line) dipped below 20 intraday on July 24th, signaling oversold conditions. While not yet a definitive bullish crossover, this oversold reading aligns with the recent bounce, suggesting the potential for near-term stabilization. A confirmed MACD crossover would strengthen reversal prospects.
Bollinger Bands
Bands expanded sharply during the July sell-off, reflecting elevated volatility. Price tested the lower band on July 24th before rebounding toward the middle band (20-period MA ~$59.00). Bandwidth remains wide, indicating continued volatility risk. Failure to reclaim the middle band would signal ongoing bearish control, while a hold above $56.00 could imply a short-term basing pattern.
Volume-Price Relationship
The July 24th sell-off occurred on significantly above-average volume (16.1 million shares vs. 10-day avg ~10 million), lending credence to the breakdown. The subsequent bounce on July 25th saw reduced volume (8.07 million shares), suggesting tentative recovery attempts lack strong conviction. Notably, the March/April 2025 rally near $70 had declining volume, foreshadowing weakness, while the June 2024 surge past $75 had massive volume expansion, confirming bullish momentum at that time.
Relative Strength Index (RSI)
The 14-day RSI plunged to 29.5 on July 24th, entering oversold territory and supporting the bounce. While still neutral near 40 currently, the oversold dip provided a tactical opportunity. Importantly, significant bearish divergence preceded recent declines – RSI peaked near 60 in early July while price made higher highs above $62, warning of weakening momentum before the breakdown.
Fibonacci Retracement
Applying Fibonacci levels to the key upswing from the April 2025 low of $31.04 to the July 2025 high of $63.63 reveals critical thresholds. The 38.2% retracement at $50.45 and the 50% level at $47.34 align with historical consolidation zones. More immediately, the 23.6% retracement near $58.25 capped the late-July bounce attempts. Conclusively breaking $58.25 is key for near-term recovery prospects, while failure below $55 risks a deeper pullback toward $50.
Confluence & Divergence Summary
Converging bearish evidence exists: sustained trading below key MAs, MACD negative, and prior RSI bearish divergence. However, oversold KDJ/RSI signals and candlestick reversal patterns near the $55 support zone suggest potential short-term stabilization or rebound. The major divergence lies in volume dynamics – recovery attempts lack supportive volume, while breakdowns occur on volume expansion. This requires caution against premature reversal assumptions. Probabilistically, the trend remains downward pending a confirmed close above the 50-day MA and the $58.25 Fibonacci level to signal regained technical footing.