Tapestry Plunges 15.71% On Heavy Volume As Bearish Engulfing Pattern Emerges

Tapestry (TPR) closed at $95.69 in its most recent session, registering a significant single-day decline of 15.71% on elevated volume. This sharp pullback dominates the immediate technical landscape and warrants assessment against its broader price history.
Candlestick Theory
The pronounced 15.71% down candle on August 14th forms a bearish engulfing pattern relative to the preceding three smaller real bodies. This occurred immediately below the $114 resistance level established on August 13th, suggesting significant selling pressure manifesting at that level. The prior uptrend showed signs of weakening in the $109-$114 range. Immediate support rests at the day's low of $92.62, with stronger historical support near $85 established during the July consolidation zone.
Moving Average Theory
Calculated averages reveal: 50-day MA at ~$98.40, 100-day MA at ~$84.50, and 200-day MA at ~$71.50. The current price collapse decisively breached the 50-day MA. While the price remains significantly above the longer-term 100-day and 200-day averages, confirming the primary uptrend, the sharp downward trajectory places the 200-day MA as a distant but critical long-term support area. The near-term posture is bearish.
MACD & KDJ Indicators
The MACD signal line is below zero, with the histogram deep in negative territory, confirming strong bearish momentum acceleration. The KDJ oscillator shows the K-line at ~25 and D-line at ~28, indicating near-oversold territory following the sharp drop. However, this oversold reading emerged after the crash rather than preceding it as a divergence. The KDJ suggests potential for a short-term bounce, but the MACD emphasizes dominant selling pressure. A key divergence exists here, with MACD firmly bearish and KDJ implying possible exhaustion.
Bollinger Bands
The August 14th plunge propelled the price well below the 20-day moving average and pressed against the lower Bollinger Band ($92.50-$93 area). This reflects extreme volatility expansion to the downside. The magnitude of the move relative to the band's recent width highlights capitulatory momentum. Sustained trading below the lower band is unusual; a reversion towards the mean band is often anticipated but requires confirmation via price action.
Volume-Price Relationship
The crash occurred on volume significantly exceeding the recent average (~13.35 million shares vs. ~4-6 million daily average). This high volume strongly validates the bearish breakdown, indicating broad participation in the sell-off. Previous rallies (like those on August 4th and August 12th-13th) were met with relatively modest volume increases, suggesting underlying caution even during advances. The volume signature during the decline supports the bearish move.
Relative Strength Index (RSI)
Following the steep decline, the 14-period RSI now rests at approximately 31, approaching oversold territory (<30). While this reading reflects the severity of the recent drop, it does not inherently guarantee an immediate reversal. RSI can remain oversold during strong downtrends. The rapid descent from an RSI near 58 on August 13th underscores the swiftness of the negative shift. Its current warning is of potential oversold conditions, not necessarily immediate strength.
Fibonacci Retracement
Mapping the significant upswing from the June 2024 low of $39.20 to the August 13th peak of $114.05 establishes key Fibonacci retracement levels:
23.6%: $95.27
38.2%: $85.12
50.0%: $76.63
61.8%: $68.14
The current close ($95.69) aligns almost exactly with the 23.6% retracement level ($95.27). This level may offer initial psychological support. Failure here targets the more significant 38.2% level ($85.12). The 50% retracement near $76.63 converges with the 200-day moving average ($71.50), making that zone a critical confluence support area should the decline extend.
Confluence Points & Divergences
The $95-$96 zone represents significant confluence: coinciding with the August 14th intraday low ($92.62 is slightly below), the immediate Fibonacci 23.6% level ($95.27), and potential oversold signals from KDJ and RSI. This concentration suggests a high-probability zone for near-term price stabilization or a technical bounce. The primary divergence lies between MACD's strong bearish signal and KDJ's oversold reading, which typically flags short-term exhaustion. While MACD emphasizes underlying bearish momentum likely requiring more time to resolve, KDJ hints at potential for near-term oversold relief. The high-volume collapse through previous support, combined with the MACD signal, carries more weight than the KDJ/RSI warnings under such intense selling pressure.