TransDigm Shares Plunge 11.94% As Technicals Signal Bearish Breakdown Below Key Support

Candlestick Theory
TransDigm Group's recent 11.94% decline formed a decisive bearish candlestick, closing near the session low at 1416.94 after testing $1,466.13. This pattern confirms a breakdown below the critical $1,500-$1,600 consolidation zone observed throughout July 2025, establishing new resistance. Key support emerges near $1,380–$1,400, aligning with the August 5 low of $1,382.20 and the 200-day moving average. The preceding structure revealed a double top around $1,620 in late July, further reinforcing bearish reversal signals at elevated levels.
Moving Average Theory
The 50-day, 100-day, and 200-day moving averages exhibit bearish convergence. The price breached the 100-day MA (approximated near $1,450) decisively on August 5, while the 50-day MA (around $1,500) has turned downward, signaling deteriorating momentum. Crucially, the 200-day MA (approximately $1,390) now represents a pivotal support zone. The accelerated break below shorter-term MAs suggests strengthening downside pressure, with the MA alignment transitioning toward a bearish sequence (50-day below 100-day).
MACD & KDJ Indicators
MACD histogram readings turned negative in late July, with the signal line crossing bearishly on August 1–4. The August 5 plunge amplified this divergence, reflecting accelerating downward momentum. Concurrently, KDJ metrics show the %K line plunging below 20 into oversold territory, though without immediate bullish crossover signals. Both oscillators align in signaling robust bearish momentum, though KDJ's extremity suggests potential for a technical bounce despite the dominant downtrend.
Bollinger Bands
The bands contracted significantly through late July, indicating declining volatility preceding the August 5 breakdown. Price action collapsed through the lower band—a rare event occurring only twice in the prior year—signifying an oversold climax. Band expansion now confirms volatility surge to the downside. While such breaks often precede short-term rebounds, the magnitude of the move suggests sustained selling pressure may persist before stabilization occurs.
Volume-Price Relationship
August 5 recorded extraordinary volume (1.52 million shares), exceeding the 200-day average by over 300%, validating the breakdown's significance. This capitulation-style volume, combined with the price collapse, signals institutional distribution. Previous high-volume sell-offs (notably April 4 and May 6) preceded extended weakness, establishing a concerning precedent. Diminished volume during July's consolidation rallies further undermined bullish conviction.
Relative Strength Index (RSI)
RSI(14) plummeted to approximately 25 on August 5, entering deeply oversold territory for the first time since October 2024. While this warns of potential exhaustion, similar readings in April–May 2025 triggered only fleeting rebounds before further downside. Bearish divergence was evident in July as prices tested highs near $1,620 while RSI peaked at lower levels (near 60), presaging the current weakness.
Fibonacci Retracement
Drawing the retracement from the June low ($1,240.13) to July's peak ($1,620.83), key levels emerge. The 38.2% retracement ($1,476) was violated decisively, while the 50% level ($1,430) aligns with the 200-day MA support. The 61.8% retracement near $1,385 converges precisely with the August 5 low and 200-day MA, creating a high-probability rebound zone. A sustained break below this level would target the 78.6% retracement at $1,315–$1,320.
Concluding Synthesis
Multiple indicators demonstrate bearish confluence: The volume-validated breakdown below key moving averages, oversold but uncorrected RSI readings, and MACD/KDJ momentum deterioration collectively signal entrenched downside momentum. The $1,385–$1,400 zone—where the 200-day MA, Fibonacci 61.8% retracement, and August 5 low converge—represents critical short-term support. A failure here may extend declines toward $1,315–$1,320. While Bollinger Band penetration and extreme RSI readings warn of an overdue technical bounce, resistance is now firmly established at $1,450–$1,475 (50-day MA and 38.2% Fib). TransDigm Group requires decisive recovery above $1,500 to neutralize the immediate bearish structure.