Thermo Fisher (TMO) Posts 1.85% Drop, Extending Four-Day Slide to 3.52% as Technical Indicators Signal Bearish Bias

Thermo Fisher (TMO) has experienced a 1.85% decline in the most recent session, extending its losing streak to four consecutive days with a cumulative drop of 3.52%. This downward momentum suggests a potential bearish bias, warranting a detailed technical analysis to assess key drivers and potential turning points. Below is a structured evaluation using multiple frameworks, with an emphasis on confluence and divergence between indicators.

Candlestick Theory

Recent price action reveals a bearish engulfing pattern as TMO’s closing prices have consistently fallen below the prior session’s lows. Key support levels are emerging near the 520-525 range, where the stock has tested this zone multiple times in late September and early October 2025. Resistance appears at 535-540, with failed attempts to break above this level since mid-September. A breakdown below the 520 psychological level could trigger further bearish momentum, potentially targeting the 500-510 zone. However, the absence of a strong bearish confirmation (e.g., a “tombstone” or “hanging man”) suggests caution; the move may yet consolidate before resuming a downtrend.

Moving Average Theory

Short-term (50-day) and long-term (200-day) moving averages indicate a bearish crossover, with the 50-day MA now trading below the 200-day MA—a classic “death cross” signal. As of late October 2025, the 50-day MA is approximately 528, while the 200-day MA hovers near 532. This divergence suggests weakening upward momentum, aligning with the recent price decline. The 100-day MA (~530) further reinforces the bearish bias, as the stock remains below this critical threshold. Traders should monitor a potential retest of the 535-540 resistance zone for signs of a bullish reversal, though the broader trend remains bearish.

MACD & KDJ Indicators

The MACD histogram has turned negative, with the MACD line crossing below the signal line in late September 2025—a bearish divergence. Concurrently, the KDJ stochastic oscillator shows oversold conditions, with the %K line dropping below 30 and %D following closely. This suggests a temporary oversold condition, but the lack of a bullish crossover in the KDJ (e.g., %K crossing above %D) indicates that the downtrend may persist. A divergence between the MACD and KDJ—where the price makes a new low but the indicators do not—could signal a potential reversal, though this remains speculative without confirmation.

Bollinger Bands

Volatility has increased recently, with TMO’s price reaching the lower band of the Bollinger Bands (currently ~520-525). This aligns with the bearish engulfing pattern and suggests oversold territory. However, the bands have widened significantly since mid-September, indicating heightened uncertainty. A contraction in volatility (narrowing bands) could precede a breakout, but given the current bearish bias, a break below the lower band is more probable. Traders should watch for a test of the 500-510 zone as a potential target.

Volume-Price Relationship

Trading volume has spiked during the recent decline, particularly in late September and early October 2025, confirming the downward move. However, volume has started to taper off in the last two sessions, which may indicate waning bearish momentum. A surge in volume during a potential rebound could validate a short-term reversal, while declining volume during further declines would reinforce the bearish outlook.

Relative Strength Index (RSI)

The 14-day RSI has dipped below 30, confirming an oversold condition. However, this does not necessarily signal a reversal—TMO could remain in oversold territory until a bullish catalyst emerges. Historical data shows that RSI has bounced off 30 on multiple occasions without significant price recovery, suggesting that traders should avoid overreliance on this indicator. A closing above the 50-55 RSI threshold (currently at ~40) would be necessary to signal a potential trend reversal.

Fibonacci Retracement

Applying Fibonacci levels between the recent high of ~545 (mid-September 2025) and low of ~500 (early October 2025), key retracement levels are at 510 (61.8%), 520 (50%), and 530 (38.2%). The stock is currently consolidating near the 520-525 range, which overlaps with the 50% retracement level. A break below 510 would target the 500 psychological level, while a rebound above 530 could reinvigorate the bullish trend.

Backtest Hypothesis

The backtest strategy leverages the MACD death cross as a sell signal, validated by historical data from 2022 to 2025. The results indicate a 54.55% win rate over three days and a 51.52% win rate over 10 days, with a modest 0.44% return. However, the 30-day return turns negative (-0.24%), suggesting that the bearish bias is stronger in the short term. Recent technical setups (MACD death cross + Bollinger Bands narrowing in September 2025) align with this pattern, though the mixed fundamental context (e.g., Q2 2025 earnings beat) introduces uncertainty. For short-term traders, this strategy offers a probabilistic edge, but long-term investors should prioritize fundamentals such as TMO’s market leadership and strategic acquisitions.