Constellation Energy Drops 3.02% After Hitting Record High As Technical Indicators Flash Bearish Signals

Constellation Energy (CEG) declined 3.02% in the latest session, closing at 336.65 after establishing a new high of 348.44 earlier in the day. This price action forms a critical juncture for technical evaluation.
Candlestick Theory
Recent candlestick patterns reveal significant volatility. The 2025-09-22 session formed a strong bullish candle (low: 326.50, high: 347.33, close: 347.12), followed by a bearish engulfing pattern on 2025-09-23 (high: 348.44, low: 336.14, close: 336.65). This reversal signal near the 348 resistance level suggests exhaustion after the rally. Key support emerges at 320 (tested multiple times in September 2025), while resistance solidifies at 348-350, aligning with the 2025-09-23 peak.
Moving Average Theory
The 50-day moving average (approx. 330) provided support during the September consolidation, while the 100-day (approx. 310) and 200-day (approx. 280) MAs maintain upward slopes, confirming the long-term bullish trend. However, the latest close (336.65) hovering near the 50-DMA indicates weakening short-term momentum. A decisive break below this level may signal further downside toward 320, where the 100-DMA converges with horizontal support.
MACD & KDJ Indicators
The MACD histogram shows deteriorating bullish momentum, with the signal line threatening to cross below the MACD line—a potential bearish crossover. KDJ registers an overbought exit (K-line dropping from 85+), aligning with the price reversal. While KDJ’s %J now approaches neutral territory (approx. 45), bearish divergence is evident: the 2025-09-23 price high (348.44) wasn’t confirmed by equivalent KDJ peaks, warning of weakening upside momentum.
Bollinger Bands
Price pierced the upper Bollinger Band (20-period, 2 SD) on 2025-09-22/23, typically indicating overextended conditions. The subsequent rejection triggered a reversion toward the 20-period midline (~335), coinciding with the 50-DMA. Bollinger Band width expanded 15% during the rally, reflecting elevated volatility. A close below the midline may foreshadow a test of the lower band (~315), especially if volatility persists.
Volume-Price Relationship
The 6.38% rally on 2025-09-10 featured the year’s second-highest volume (4.04M shares), validating breakout momentum. Conversely, the 3.02% decline on 2025-09-23 occurred on above-average volume (2.50M shares vs. 30-day avg ~2.2M), confirming bearish conviction. This distribution pattern near resistance suggests institutional selling. Declining volume during August–September rallies indicated weakening buyer commitment.
Relative Strength Index (RSI)
The 14-day RSI retreated from overbought territory (peaking near 75 on 2025-09-22) to 58 after the sell-off. While no longer overbought, the failure to sustain readings above 70 during new highs implies waning bullish strength. RSI support near 50 (midline) aligns with the 50-DMA and 38.2% Fibonacci level—a breach below 50 could accelerate selling pressure. Notably, RSI divergence preceded the September pullback, as higher price highs weren't matched by higher RSI highs.
Fibonacci Retracement
Applying Fibonacci to the swing low (319.76 on 2025-09-19) and high (348.44 on 2025-09-23):
- 23.6% retracement: 341.67
- 38.2%: 337.48 (near the 50-DMA and latest close)
- 50.0%: 334.10 (key psychological support)
- 61.8%: 330.72 (confluence with 100-DMA and September lows)
Price closed below the 23.6% level, targeting the 38.2–50% zone. This retracement cluster (334–330) aligns with historical support, making it a critical battleground for buyers.
Confluence and Divergence Observations
A significant confluence exists at 330–335, where the 38.2–50% Fibonacci zone, 50-DMA, and Bollinger midline converge. This region may determine near-term direction. Bearish divergences are notable: MACD and RSI failed to confirm the 2025-09-23 price high, while KDJ showed overbought exhaustion. Volume divergence during the September rally further undermines bullish conviction. These factors collectively suggest a near-term consolidation or correction phase is likely. Key monitoring points include the sustainability of 334–330 support and whether volume contracts during pullbacks, which could signal accumulation.