Diageo Plunges 5.07% as Death Cross Confirms Bearish Breakdown Below Key Support

Diageo (DEO) closed sharply lower at $105.20 in the latest session, marking a significant 5.07% decline on elevated volume, potentially signaling strong bearish sentiment and breaking below recent consolidation levels.
Candlestick Theory
The sharp sell-off from June 4th's bullish close ($110.82) to June 5th's bearish engulfing candle ($105.20) indicates capitulation. The decisive break below the May consolidation support near $108 erodes a critical psychological level. Immediate resistance now rests at $107.50–$108.50 (recent congestion zone), while the $105–$104.40 region offers temporary support, aligning with the March-April swing lows.
Moving Average Theory
The 50-day MA has crossed below the 100-day and 200-day MAs, confirming a bearish medium-term "death cross." Current price trades below all three MAs (50-day ~$115, 100-day ~$119, 200-day ~$122), reinforcing strong downward momentum. The steeply declining slope of the 50-day MA signals persistent selling pressure, with any rallies likely capped near $110–$112.
MACD & KDJ Indicators
The MACD histogram remains in negative territory with no convergence signal, reflecting ongoing bearish momentum. KDJ shows the K-line (20) and D-line (28) embedded in oversold territory, though without bullish crossover confirmation. While deeply oversold conditions suggest potential for tactical rebounds, the lack of divergence warns that downward momentum may persist.
Bollinger Bands
Price has breached the lower Bollinger Band ($107.80), accompanied by expanding band width—indicating elevated volatility and trend continuation risk. The absence of a closing price recovery above the lower band implies that the breakdown may not yet be exhausted. A contraction in bands would be needed to signal reduced volatility and possible stabilization.
Volume-Price Relationship
The sell-off was validated by substantially above-average volume (~940k shares vs. 30-day avg ~850k), confirming conviction behind the move. However, prior rallies (e.g., April 9th, 22nd) lacked comparable volume commitment, suggesting bearish volume asymmetry. Sustained downside momentum would require ongoing volume support near current levels.
Relative Strength Index (RSI)
Daily RSI (34) has dipped below the oversold threshold (30) but shows no bullish divergence. While this may imply near-term exhaustion, oversold readings can persist in strong downtrends. A relief rally would require RSI recovery above 40 with corresponding price action.
Fibonacci Retracement
Applying Fib levels between the April 4th low ($103.97) and January 30th peak ($121.57): The 38.2% retracement ($115.50) was breached in May, while the 50% level ($112.77) capped recent bounce attempts. Current price trades below the 61.8% support ($104.40), which now becomes critical. Failure to hold could expose the full 100% retracement toward $103.97.
Confluence & Divergence
Confluence exists around $104.40–$105 (April low, Fib 61.8%, psychological support). A breakdown here would align with the bearish MA configuration and lack of RSI/MACD divergence. Divergence is noted in KDJ’s oversold hook without price confirmation, while Bollinger Band expansion contradicts oversold signals, suggesting caution against premature reversal calls. The volume-backed break of multi-month supports reinforces the dominant downtrend, though deeply oversold oscillators hint at technical consolidation potential near key Fib levels.