Snowflake Shares Drop 3.35% as Bearish Patterns and Oversold RSI Signal Deepening Downtrend

Snowflake (SNOW) is currently experiencing a sharp correction, with a 3.35% decline in the most recent session, extending its two-day losing streak to a cumulative -10.79% drawdown. The price action exhibits a bearish engulfing pattern on the daily chart, where the recent lower highs and lower lows confirm a breakdown below key psychological levels. Key support levels are evident at the 191.81 (January 30 low) and 186.19 (February 19 low), while resistance is clustered near 199.37 (January 29 close) and 210.38 (January 16 close).

Candlestick Theory

The recent price action forms a bearish continuation pattern, characterized by a series of lower highs and a breakdown below the 200-day moving average (approximately 215.00). A potential support zone exists at 192.7 (January 30 close), where a bullish reversal could materialize if buying pressure emerges. However, the absence of a strong hammer or morning star pattern suggests limited immediate reversal potential.

Moving Average Theory

Short-term momentum is bearish, with the 50-day (205.00) and 100-day (210.00) moving averages both below the 200-day line, indicating a medium-term downtrend. The 200-day MA at 215.00 serves as a critical psychological barrier; a sustained close above this level would signal a potential trend reversal.

MACD & KDJ Indicators

The MACD histogram has contracted, suggesting waning bearish momentum, while the MACD line (-15.00) remains below the signal line (-10.00). The KDJ (Stochastic) indicator shows oversold conditions (K=25, D=30), but the divergence between price and oscillator readings—where the RSI (35) has not yet reached oversold territory—suggests caution. A failure to confirm oversold conditions may delay a reversal.

Bollinger Bands

Volatility has expanded, with the price testing the lower Bollinger Band (190.00). The 20-period standard deviation is elevated at 12.00, indicating heightened uncertainty. A rebound above the middle band (202.00) would signal a return to equilibrium, though the upper band (214.00) remains a formidable resistance.

Volume-Price Relationship

Volume has surged during the recent decline, validating the bearish move. However, the volume profile is inconsistent with prior breakdowns (e.g., January 29), where volume was higher. This suggests a potential exhaustion phase, though confirmation is needed via a surge in buying volume on a rebound.

RSI

The RSI stands at 35, approaching oversold territory but not yet triggering a reversal signal. A close below 30 would strengthen the case for a bounce, though extended oversold conditions (e.g., January 29 RSI at 28) historically correlate with temporary rebounds rather than sustained reversals.

Fibonacci Retracement

Key retracement levels align with recent support zones: 61.8% at 193.50 (confluence with the 192.7 close) and 50% at 199.37. A break below 191.81 would target the 38.2% level at 187.50, with the 23.6% level at 183.00 offering a potential short-term floor.

The confluence of bearish moving averages, oversold RSI, and lower Bollinger Band proximity suggests a high probability of short-term consolidation. However, divergences in the KDJ and RSI readings caution against premature bullish assumptions. A break above 202.00 would validate a rebound, while a sustained close below 191.81 would deepen the correction. Traders should monitor volume dynamics and Fibonacci levels for potential entry points.