Workday Stock Plunges 7% Below Key Moving Averages As Bearish Signals Intensify

Candlestick Theory
Workday's recent price action displays concerning patterns. The August 11, 2025 session formed a long bearish candle closing near its low ($213.69) after testing the $223.27 resistance, confirming distribution. Preceding this, a series of small-bodied candles near $220-$222 (August 4-8) indicated indecision before the breakdown. Key support now resides at the August 12, 2024 low of $209.88, while resistance is evident near $222-$225 – the convergence of the August 1 close and the July 31 low. The decisive breach below $220 invalidates the prior consolidation zone, shifting it to resistance.
Moving Average Theory
All key moving averages exhibit bearish alignment. The 50-day MA (approximated near $229) crossed below the 100-day MA (~$238) in late July and the 200-day MA (~$242) in early August, forming a "death cross." Price currently trades 7% below the 50-day MA, confirming a strong downtrend. The sequence of 200-day > 100-day > 50-day > price reflects persistent selling pressure. Any recovery faces layered resistance at these descending MAs, requiring a sustained close above the 50-day MA to signal potential trend reversal.
MACD & KDJ Indicators
The MACD (12,26,9) shows the signal line firmly below the MACD line in negative territory since late July, with both accelerating downward – confirming bearish momentum. KDJ analysis reveals the %K and %D lines entrenched below 20 since early August, indicating prolonged oversold conditions. However, the lack of bullish divergence suggests no imminent reversal signal. Recent minor upticks in KDJ (August 5-6) were swiftly rejected, underscoring the dominance of selling pressure.
Bollinger Bands
Bollinger Bands (20,2) expanded sharply during the August 7-11 sell-off, reflecting rising volatility. Price persistently closes near or below the lower band, a sign of continued downside momentum. The August 6 attempt to reach the middle band ($227) failed, reinforcing its role as dynamic resistance. Band expansion during a downtrend suggests the move may have further to go. A contraction phase would be needed to signal reduced bearish energy.
Volume-Price Relationship
High-volume declines validate the bearish trend. Notably, the August 11 drop (-3.77%) occurred on 5.08M shares – the highest volume in two months – confirming institutional distribution. Similarly, the May 23, 2025 plunge (-12.52%) recorded extreme volume (9.91M shares), establishing a major resistance level. Conversely, recovery attempts like August 6 (+1.82%) saw below-average volume (2.32M), lacking conviction. Current volume profiles support sustained downward pressure.
Relative Strength Index (RSI)
The 14-day RSI reads 29, technically oversold. However, it has hovered near or below 30 since August 7, demonstrating persistent weakness. While such extended oversold conditions sometimes precede bounces, the RSI has established a series of lower highs since June (divergence from minor price rallies), warning that oversold levels can persist in strong downtrends. A recovery above 40 is needed to suggest improving momentum.
Fibonacci Retracement
Applying Fibonacci to the decline from the December 9, 2024 high ($294) to the August 12, 2024 low ($209.88) shows critical levels: The 38.2% retracement ($241.6) rejected price decisively in May-June 2025. The 50% level ($251.94) aligns with the July peak. Current price sits below the 23.6% retracement ($222.15), which now acts as immediate resistance. The confluence of this Fib level and the psychological $220 barrier creates a strong technical ceiling.
Confluence & Divergence Observations
Multiple indicators converge to underscore resistance near $220-$222 (23.6% Fib, former support, VWAP resistance). The oversold RSI and KDJ conflict slightly with the bearish MACD and moving average structure, suggesting potential for a technical bounce – but not necessarily a reversal. No significant bullish divergence exists. Probabilistically, the path of least resistance remains downward below $220, with a sustained break above this zone needed to alter the bearish outlook. Volume patterns and candlestick structures corroborate prevailing selling pressure. Workday's technical posture remains fragile, requiring cautious monitoring for capitulation signals or reversal confirmation.