Navigating Bearish Waters: Onto Innovation Inc. Nears a Critical Juncture

Technical Analysis of Onto Innovation Inc. (ONTO)

1. Trend Analysis

• Long-term Trend: A review of the historical price data shows a general downtrend starting from highs of approximately $228 in January 2025 to recent lows near $88 in May 2025. This indicates a significant bearish long-term trend.
• Intermediate Trend: There was a period of stabilization and temporary recovery in early March with prices briefly gaining strength back up to levels around $141. However, this was followed by another steep decline, establishing a continuation of the downward trend.
• Short-term Trend: Recent data from May 9 through May 12 suggest a short-term recovery from $88 to $93.5, but the overall momentum remains weak within the broader downtrend.

2. Moving Averages

• Simple Moving Averages (SMA): The recent closing prices hovering around $93 sit below longer-term SMAs (50-day and 200-day SMA), which are declining, further confirming a bearish sentiment in the market.
• Exponential Moving Average (EMA): The 20-day EMA lies below the 50-day EMA, reinforcing the presence of bearish trends.

3. Volume Analysis

• Recent Activity: Volume noticeably spiked around the price plunge on May 9, suggesting strong bearish pressure at that point, potentially driven by panic selling or reaction to external news.
• Current Volume Behavior: There's a significant drop in volume after the initial panic, indicating a potential volume drying up which might cause short-term consolidation or volatility.

4. Momentum Indicators

• Relative Strength Index (RSI): Assumed calculations place the RSI well into the oversold territory recently (below 30), suggesting potential for a technical rebound or some sideways movement.
• MACD (Moving Average Convergence Divergence): The MACD might be below the signal line indicating a continuation of selling pressure; however, it shows signs of convergence which can be interpreted as the weakening of selling momentum.

5. Recent Candlestick Patterns

• Bearish engulfing patterns were observed during recent market days signaling selling interest remains strong.
• Doji candles appeared in smaller frames suggesting market indecision at current price levels.

6. Support and Resistance Levels

• Support: A strong support is seen around $85, which aligns with the lows from the sharp drop on May 9. If this support holds, it signifies a potential bottom.
• Resistance: Immediate resistance is set near $95, a recovery level seen in intra-day sessions which could act as a short-term barrier.

Conclusion and Decision:

Based on the consolidated technical analysis, the overall sentiment for Onto Innovation Inc. remains bearish. Despite temporary recovery signals, key indicators such as long-term moving averages, downtrends, and volume analysis hint at more downside risk. However, the presence of oversold conditions may result in some sideways movement or brief recoveries.

The decision leans towards taking a "Sell" position as any rebounds might be short-lived within a bearish context. A consideration for shorting is advised.

Final Decision: Sell

With the current market setup, betting on further declines or a return to recent lows post any minor rebounds seems prudent.