Wix.com Ltd. (WIX) experienced a volatile session on Wednesday as shares opened lower, shot up to nearly $61.40 and then ended the day slightly lower on double average daily volume. Digital financial news publisher TheFly attributed the volatility to unsubstantiated rumors that Cisco Systems, Inc. (CSCO​) may be interested in an acquisition of Wix, which fueled the purchase of speculative call options and sent shares higher in response throughout the course of the day.

While Wix shares are trading more than 60% higher over the past 52 weeks, the stock has tumbled more than 20% over the past three months. Shares fell more than 10% after second quarter financial results showed a 50.6% increase in revenue to $103.52 million but no net income, despite expectations for earnings per share of nine cents. The DeviantArt acquisition, in particular, has weighed on Wix's near-term financial results. (See also: Wix.com Inks a $36 Million Deal for DeviantArt.)

Technical chart showing the performance of Wix.com Ltd. (WIX) stock

From a technical standpoint, the stock broke down from the 50-day moving average in late July to reach S1 support levels at $55.82 during Wednesday's lows. The stock's most recent candle showed an engulfing pattern that could suggest an upcoming rebound from support levels. Meanwhile, the relative strength index (RSI) remains oversold at 30.12, but the moving average convergence divergence (MACD) remains in a significant bearish downtrend.

Traders should watch for a rebound from S1 support levels to retest the 200-day moving average at $61.97 or potentially move to the pivot point at $66.88. If the stock breaks down from S1 support, shares could move to S2 support at $49.95. The company has experienced some trouble over the past three months, which has led to a short-term bearish bias, but the long-term bullish bias remains in place with the 50-day moving average above the 200-day moving average. (For more, see: Could Wix.com's Rally Finally Be Coming to an End?)

Chart courtesy of StockCharts.com. The author holds no position in the stock(s) mentioned except through passively managed index funds.

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