Toast Stock Drops 3.00% To $43.00 As Bearish Signals Intensify

Toast (TOST) declined 3.00% in the most recent session, closing at $43.00 after trading between $42.41 and $43.84 on volume of 5.87 million shares. This extended a pullback from the $49.66 peak reached on August 5th, with price action now testing critical technical levels. The following analysis evaluates key indicators to assess forward momentum probabilities.
Candlestick Theory
Recent sessions show bearish confirmation patterns. The August 8th candle formed a long red body (-5.55%) engulfing prior gains, followed by three consecutive lower highs. The latest session established a new swing low at $42.41, which now serves as immediate support. Resistance emerges near $44.50-$45.00, aligning with last week's consolidation zone and the July high of $46.81. A sustained break below $42.41 would validate bearish continuation.
Moving Average Theory
The 50-day moving average has crossed below the 100-day average, signaling deteriorating medium-term momentum. Current price ($43.00) trades below all key SMAs (50D at $44.20, 100D at $45.10, 200D at $46.80), confirming a bearish multi-timeframe alignment. This death cross configuration suggests persistent selling pressure, though oversold conditions near $42.00 may invite tactical rebounds. The 200-day SMA maintains a positive slope, preserving the longer-term uptrend that began at the $23.56 November 2024 low.
MACD & KDJ Indicators
MACD lines (12/26-day EMAs) remain below the zero line with a widening negative histogram, indicating accelerating downward momentum. Meanwhile, the KDJ oscillator (14,3,3 settings) shows %K (15) and %D (18) penetrating deeply into oversold territory below 20. This divergence—where MACD signals continued weakness while KDJ suggests exhaustion—creates tension. Historically, such setups preceded reversals in December 2024 and May 2025, though confirmation requires KDJ hooking upward.
Bollinger Bands
Volatility expansion is evident, with bands widening significantly after the August 5th breakdown. Price currently hugs the lower band ($41.80 today), typically indicative of downside momentum extremes. The 20-day average at $45.30 now acts as dynamic resistance. Narrowing bands preceded July’s directional move, suggesting current expansion may persist until price stabilizes above $43.50. Bandwidth remains at 120% of its 30-day average, sustaining high-volatility conditions.
Volume-Price Relationship
Distribution signals dominate, with August 6th’s 21.5 million shares traded (-3.71% close) marking the highest volume down day in six months. Subsequent sessions show below-average volume during recovery attempts, invalidating upside conviction. The latest session’s moderate volume decline aligns with typical pullback behavior but lacks capitulation. Sustained rallies require volume expansion beyond the 10M-share threshold, last observed on upside moves in mid-July.
Relative Strength Index
The 14-day RSI reads 28, firmly in oversold territory. This echoes KDJ’s signal and marks the lowest reading since March 2025’s $32.61 bottom. While previous dips below 30 preceded 10-15% rebounds, RSI’s downward slope warrants caution. The indicator has not yet formed positive divergence against price, leaving reversal potential unconfirmed. Historically, Toast requires multiple oversold tests before establishing durable lows.
Fibonacci Retracement
Using the $23.56 (August 2024) trough to $49.66 (August 2025) peak, key retracement levels cluster with observed price behavior. The 38.2% level ($40.30) supported the May 2025 bounce, while the 50% level ($36.60) aligns with the 200-day SMA. Current price tests the 23.6% retracement ($42.80), which held during Wednesday’s session. Confluence exists near $41.50, where the 200-day SMA and June’s swing low converge—making this level critical for structural integrity.
Confluence & Divergence Synthesis
Bearish consensus dominates near-term indicators, with moving average alignment, MACD momentum, and volume distribution affirming downside bias. Significant confluence emerges at $41.50-$42.40, combining Fibonacci support, horizontal price structure, and the 200-day moving average. However, oversold extremes in KDJ and RSI alongside Bollinger band proximity warn of technical exhaustion. Key watchpoints include RSI divergence development on retests of $42.41 and MACD histogram reduction to signal downside momentum decay.