Ambev Shares Slide 5.35% In 3 Days As Death Cross Signals Bearish Momentum

Ambev (ABEV) declined 3.77% to close at $2.30 in the latest session, marking its third consecutive daily loss and a cumulative 5.35% drop over this period. This downward momentum reflects heightened selling pressure, warranting a multi-faceted technical assessment.
Candlestick Theory
Recent price action shows three consecutive bearish candles with progressively larger bodies, culminating in a long red candle on July 28. This pattern signals strong selling conviction. Key support emerges at $2.28–$2.30 (July’s swing low and psychological level), with resistance at $2.36 (recent intraday high) and $2.42 (previous consolidation zone).
Moving Average Theory
The 50-day MA ($2.38) recently crossed below the 100-day MA ($2.41), confirming a death cross. Both averages now trade above the current price, indicating entrenched bearish momentum. The 200-day MA ($2.32) is being tested, with a sustained break below potentially accelerating downward pressure. This multi-period alignment underscores a deteriorating medium-term trend.
MACD & KDJ Indicators
MACD histogram bars are deepening below the signal line, reflecting strengthening bearish momentum. KDJ registers oversold conditions (K-line: 18, D-line: 22), though no bullish divergence is evident. While oversold KDJ readings sometimes precede bounces, the MACD’s bearish trajectory suggests any recovery may be short-lived without confirmation from other indicators.
Bollinger Bands
Bands have expanded sharply during the three-day sell-off, signalling heightened volatility. Price currently touches the lower band ($2.29), indicating oversold territory. Historically, such band-touching events preceded minor bounces, but sustained trading below the lower band would imply continued downside acceleration.
Volume-Price Relationship
Volume surged 80% during the latest decline compared to the prior session, validating bearish conviction. Distribution patterns emerged earlier, including a July 16 volume spike (+290% above average) that failed to sustain upward momentum. Current high-volume selling suggests capitulation, though climactic volumes often precede short-term reversals.
Relative Strength Index (RSI)
The 14-day RSI (26) resides deep in oversold territory, approaching levels last seen during April’s steep correction. While this warns of potential exhaustion in selling pressure, RSI can remain oversold during strong downtrends. Traders should await bullish confirmation from price action before interpreting this as a reversal signal.
Fibonacci Retracement
Applying Fib levels to the upswing from the April 8 low ($2.15) to the July 2 peak ($2.49) shows critical confluences: the 61.8% retracement ($2.28) aligns with July’s lows, while the 50% level ($2.32) provided temporary support last week. A decisive break below $2.28 would expose the 78.6% retracement at $2.19.
Confluence and Divergence Observations
Notable confluence exists near $2.28–$2.30, where Fibonacci support, the 200-day MA, and Bollinger’s lower band converge. This zone may trigger technical bounces. However, bearish unanimity dominates across moving averages, MACD, and volume signals. No significant bullish divergences appear between price and oscillators, reinforcing near-term downside risks. Traders should monitor $2.28 for potential consolidation, though the burden of proof remains on bulls to reclaim the 200-day MA.