On Semiconductor Stock Slides 4.38% As Bearish Signals Dominate Technical Charts

Candlestick Theory
On Semiconductor's recent price action reveals significant technical signals. The most recent session (July 7) formed a bearish candle closing near its low ($54.61) after failing to breach the $56.23 resistance, confirming seller dominance. A hammer pattern emerged on July 2 at $53.91 (near the 50% Fibonacci level), triggering a 4.38% rally, but subsequent rejection at $56.23 resistance suggests distribution. Key support now resides at the June swing low of $51.53 (July 1), with resistance firmly established at $56.23–$56.60.
Moving Average Theory
The stock trades below all critical moving averages, signaling entrenched bearish momentum. The 50-day MA (approximately $59.50) crossed below the 200-day MA (near $58.20) in late June, confirming a "death cross." This structure reinforces the downtrend visible since February 2025. The 100-day MA (around $58.80) caps upside attempts, as seen in the July 3 rejection near $57.13. Until price reclaims the 50-day MA, the path of least resistance remains downward.
MACD & KDJ Indicators
MACD shows sustained bearish momentum, with its histogram in negative territory since mid-June and no signs of convergence. KDJ readings (K: 28, D: 35, J: 14) approach oversold territory, but the ongoing downtrend may delay reversal signals. Notably, KDJ’s failure to breach its equilibrium line (50) during July rebounds highlights weak buying momentum. A bullish divergence is absent, aligning with the broader bearish structure.
Bollinger Bands
Volatility contraction preceded the recent breakdown, with bands narrowing significantly in late June. Price now hugs the lower Bollinger Band ($52.80), confirming downward momentum. Band expansion on July 7’s decline signals strengthening bearish conviction. Any recovery faces immediate resistance at the mid-Bollinger Band ($55.00), while sustained trading below $54.50 may trigger further downside toward the lower band’s projected extension near $52.
Volume-Price Relationship
Volume patterns validate bearish momentum. The July 2 rally occurred on robust volume (10.4M shares), but subsequent declines saw increasing volume (5.57M shares on July 3, 7.82M on July 7), confirming distribution. Notably, the June 4 surge (28.1M shares) marked a buying climax, as prices failed to sustain highs despite elevated activity. Declining volume during minor rallies (e.g., July 1 and 3) underscores weak demand.
Relative Strength Index (RSI)
The 14-day RSI (approx. 34) edges toward oversold territory but remains above the critical 30 threshold. It has not registered oversold since June 4 (RSI: 28), highlighting persistent downside pressure. Bearish trend confirmation occurs when RSI holds below 45–50 during rebounds—a pattern observed throughout June and July. A decisive break below 30 is needed to signal oversold exhaustion.
Fibonacci Retracement
Using the November 2024 high ($78.74) and June 2025 low ($51.53), key retracement levels emerge:
- 38.2%: $61.60 (major resistance)
- 50%: $54.30 (July 7 low violated this level intraday)
- 61.8%: $51.50 (critical support)
The repeated rejection at the 38.2% level (May–June) and failure to hold the 50% retracement suggest bears dominate the intermediate trend. A sustained break below $54.30 may target the 61.8% support ($51.50), aligning with the June swing low.
Confluence & Divergence
Confluence exists at $51.50–$52.00, where the 61.8% Fibonacci level, June swing low, and lower Bollinger Band converge—a pivotal support zone. Bearish consensus dominates: Death cross, volume-confirmed breakdowns, and RSI/MA alignment all signal downside continuation. The only minor divergence is KDJ’s oversold proximity, but this lacks confirmation from other indicators. Probabilistically, rallies toward $56.00 offer shorting opportunities unless MACD forms a bullish crossover or price reclaims the 200-day MA.