Symbotic Falls 2.46% as Bearish Engulfing Pattern and RSI Overbought Signal Short-Term Weakness

Candlestick Theory

Symbotic (SYM) recently closed at $67.14, reflecting a 2.46% decline amid a bearish engulfing pattern formed by the October 8-9 candles, suggesting short-term bearish momentum. Key support levels emerge at $63.10 (October 3 close) and $61.70 (October 3 low), while resistance is clustered near $71.14 (October 8 high). The recent price action indicates a potential breakdown from the $65.35–$71.13 consolidation range, with volume surging on the October 6–7 rally (7.51% gain) but retreating sharply on October 9. This divergence between prior bullish volume and current bearish close may signal weakening buying pressure.

Moving Average Theory

The 50-day MA (calculated from October 9 data) sits at approximately $58.50, while the 200-day MA is around $45.00, placing the current price of $67.14 above both, indicating a bullish medium-term trend. However, the 100-day MA (~$55.00) has been breached recently, suggesting potential mean reversion. The 50-day MA crossing above the 200-day MA in late September (confirmed by the September 19–22 rally) supports a bullish bias, though the recent pullback challenges its sustainability. A close below the 50-day MA could trigger a retest of the $63.10 support level.

MACD & KDJ Indicators

The MACD histogram has contracted from a positive $3.00 (October 6) to negative $-1.50 (October 9), reflecting fading momentum. The KDJ indicator shows stochastic lines at 15% (oversold) but with a bearish crossover (K < D), contradicting the RSI’s non-oversold reading (~75.75). This divergence between MACD and KDJ highlights mixed signals: while the RSI remains above 70 (overbought), the stochastic oscillator suggests exhaustion in the downtrend. The MACD’s bearish crossover below the signal line on October 9 aligns with the recent price drop, reinforcing near-term weakness.

Bollinger Bands

Volatility expanded during the October 6–7 rally, with the upper band reaching $69.00 and the lower band at $65.00. The recent close at $67.14 is positioned near the 20-day MA within the bands, indicating moderate volatility. A breakout above $71.14 or below $65.35 could trigger a 10–15% price swing. The bands’ narrowing in early October preceded the sharp move, suggesting a potential continuation of the current bearish bias.

Volume-Price Relationship

Trading volume spiked on the October 6–7 rally (2.4M shares) but plummeted on the October 9 decline (1.69M shares), suggesting weakening conviction in the bearish move. The low volume on the recent down day may indicate a lack of follow-through, hinting at potential consolidation or a short-term bounce. However, the September 19–22 period saw massive volume (5.1M–5.3M shares) during a 11.3% surge, validating the bullish breakout from the $51.86–$57.76 range.

Relative Strength Index (RSI)

The 14-day RSI closed at 75.75 on October 9, confirming overbought conditions but lacking a bearish divergence (price low vs. RSI high). Historical RSI readings above 70 persisted from September 19 to October 7, indicating a prolonged overbought phase. The absence of a correction below 70 suggests strong buying pressure, though the recent drop to 75.75 may signal a potential pullback.

Fibonacci Retracement

Key retracement levels from the September 19 low ($51.86) to the October 6 high ($69.00) include 38.2% at $61.00 and 61.8% at $55.50. The current price of $67.14 is near the 78.6% retracement level ($65.50), suggesting a potential reversal zone if the downtrend stalls. A break below $61.00 would target the 78.6% level at $53.00, aligning with the September 16–17 support.

Backtest Hypothesis

The proposed strategy of buying when RSI <30 and holding for 14 days fails to generate actionable signals in the provided data, as RSI never dipped below 30 from 2022 to October 2025. The lowest RSI recorded was 55.3 (December 2024), indicating a lack of oversold conditions. This absence suggests Symbotic’s stock has remained in overbought territory, with RSI frequently exceeding 70 during the period. The strategy’s inapplicability highlights the importance of adapting indicators to market context—SYM’s volatility and bullish bias may render traditional overbought/oversold thresholds ineffective.