Dropbox, Inc. saw its stock drop by 7.55% in a single day, bringing it nearly 15% down from a peak on November 7. This decline broke an important long-term trendline established in June 2024, marking the fifth test of this line since last year and suggesting a possible shift in the company’s momentum. The stock closed below this key upward trendline, indicating a potential ongoing decline. If the stock continues to fall past Wednesday’s low, it might hit the support level of $26.13 and could drop further to $25.33. If Dropbox’s stock rebounds from these support levels, it may aim to reach the $27.74 resistance zone again. For the stock to show a positive trend, it must overcome the broken trendline near the $27.74 mark, which now acts as a significant barrier to future upward movements. The drop of 7.55% on December 10, 2025, raises a red flag for investors. The stock has broken through a key support trendline that has held since mid-2024. This breakdown indicates a major shift in market sentiment, putting the $26.13 support level in focus for the weeks ahead. This decline is happening alongside news that Alphabet is expanding its Google One AI features, which is putting pressure on the cloud storage market. Given this headwind, it might be a good time to consider buying put options with January 2026 expiration dates, targeting strike prices around $26.00 or even $25.50. The trading volume during yesterday’s session was 150% higher than its 30-day average, showing strong belief in the sell-off. We recall a similar weakness in late 2023, when concerns about slowing user growth led to a longer downturn. That historical price pattern suggests this current break could extend beyond a single day if we do not quickly reclaim the lost trendline. This past experience supports the case for adopting bearish positions or buying protection for any existing shares. The wider market isn’t offering much support either. The latest Consumer Price Index report from December 9, 2025, came in slightly higher than expected, causing unease across the tech sector. The Volatility Index (VIX) has increased to 18.2 in response, which makes options pricing a bit more costly but also reflects rising uncertainty. In this situation, we recommend considering defined-risk strategies like bear put spreads to manage a possible decline. If the support at $26.13 holds, the initial sign of a real recovery would be a strong move back above the old trendline, which now serves as major resistance at $27.74. For us to view a bullish reversal, we would need to see the price firmly reclaim that level with high trading volume. Until that happens, any small bounce in the stock is likely an opportunity for sellers to re-enter the market.

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