Workday Slides 3.38% In Three Days As Technicals Signal Bearish Momentum

Workday (WDAY) declined 1.68% in the latest session, marking its third consecutive daily loss with a cumulative 3.38% drop over this period, closing at $219.01 amidst increasing trading volume. This recent weakness provides context for our technical evaluation.
Candlestick Theory
The formation of three consecutive bearish candles confirms near-term selling pressure, with the most recent session establishing $218 as immediate support. Resistance emerges at $224.41 (today's high) and $227.36 (Sept 12 high). The Sept 11 Doji candle signaled indecision preceding the current downtrend. A decisive close below $218 would breach the June-August consolidation floor, potentially accelerating declines.
Moving Average Theory
Workday trades below all key SMAs – the 50-day (~$230), 100-day (~$235), and 200-day (~$245) – confirming bearish posture. The 50-day crossed below both longer-term averages in August, establishing a "death cross" that typically signals extended weakness. This alignment creates dynamic resistance near $230-$235, with the moving averages now sloping downward.
MACD & KDJ Indicators
The MACD line remains below its signal line and zero since late August, confirming bearish momentum. KDJ readings below 20 indicate oversold conditions, though the K-line hovering near 15 without bullish crossover suggests sustained downward pressure. Bearish convergence appears as MACD makes lower lows alongside price, though KDJ's extreme position warrants monitoring for potential relief rallies.
Bollinger Bands
The bands expanded sharply during this week's decline, reflecting volatility breakout to the downside. Price closed below the lower band ($221 estimate), an anomaly that often precedes short-term bounces but can persist during strong trends. The bandwidth expansion after August's prolonged contraction signals continuation potential, though the close outside the band suggests possible mean-reversion.
Volume-Price Relationship
Distribution patterns stand out, with the three down days occurring on escalating volume (2.68M→2.40M→3.11M shares). This validates bearish conviction, particularly noteworthy given higher-than-average volume at the $218 support. Significant volume spikes accompanied prior breakdowns like the May 23 plunge (-12.5%), reinforcing that high-volume resistance zones now cap rebounds.
Relative Strength Index (RSI)
The 14-day RSI reading near 28 signals oversold territory. However, its failure to breach 30 during late August's rebound demonstrated limited upside momentum. Bearish divergence remains evident as RSI's July high (near 60) substantially lagged price's February peak, warning of underlying weakness. While current levels suggest exhaustion, the indicator can remain oversold during strong trends.
Fibonacci Retracement
Measuring the June high ($281) to August low ($206.77), key retracement levels frame critical thresholds. The 38.2% level ($236) capped rallies in late August, aligning with the 100-day SMA. Current trading below the 23.6% level ($229) maintains bearish control. A recovery above $229-$236 remains essential to shift near-term structure, while the 50% retracement ($244) coincides with the 200-day SMA.
Confluence Notes
Significant bearish alignment emerges with: 1) Price below all key SMAs, 2) MACD negative territory, 3) High-volume breakdown below $222 support, and 4) Oversold but non-divergent RSI. The $218-$222 zone now represents critical support, with resistance converging at $229-$230 (23.6% Fib + recent breakdown point). Bullish divergence would require both MACD crossover and clearance of $236 resistance. Until volume confirms upside conviction, technical structure favors further consolidation or downside continuation.