Echostar (SATS) Stock Plunges 3.42% in Three Days as Bearish Technical Indicators Signal Downtrend

Echostar (SATS) Technical Analysis

Echostar (SATS) has experienced a three-day consecutive decline, with a 3.42% drop in the last three sessions, closing at $76.78 on October 6, 2025. The recent price action, coupled with elevated volatility and mixed indicator signals, warrants a detailed evaluation of technical and momentum dynamics.

Candlestick Theory

The recent candlestick patterns suggest bearish momentum, with a series of lower highs and lower lows forming a descending channel. Key support levels are emerging around $75.49 (October 6 low) and $73.14 (September 25 close), while resistance is clustered near $77.12 (October 3 close). A breakdown below $75.49 could trigger further declines toward $72.04 (September 25 low), aligning with a potential bearish continuation pattern. Conversely, a rebound above $77.12 might signal short-term stabilization, though the prevailing bearish bias remains intact.

Moving Average Theory

Short-term and long-term moving averages confirm a bearish trend. The 50-day MA (calculated from mid-2025 data) is below the 200-day MA, indicating a "death cross" scenario. The 100-day MA at approximately $70–$72 also lags behind the current price, reinforcing downward momentum. However, the price remains above the 200-day MA, suggesting the stock has not yet entered a severe downtrend. Traders should monitor crossovers of the 50-day and 100-day MAs for potential trend confirmation.

MACD & KDJ Indicators

The MACD histogram shows bearish divergence, with the line below the signal line and negative momentum since early October. The KDJ indicator (stochastic oscillator) is in oversold territory (K=25, D=30), but the lack of bullish divergence (price lows not aligning with K/D line lows) weakens the case for a reversal. This suggests the oversold condition may persist as the downtrend continues.

Bollinger Bands

Volatility has expanded recently, with the price trading near the lower Bollinger Band (around $75.49–$76.78). This indicates extreme bearish pressure, but the bands’ width suggests no imminent contraction to signal a potential breakout. A sustained close above the middle band ($77.50–$78.00) could indicate a shift in sentiment, though current dynamics favor continued consolidation within the lower half of the band.

Volume-Price Relationship

Trading volume has surged during the recent decline, peaking at 31.68 million shares on October 6. This high-volume sell-off validates the bearish move, as increased participation by sellers reinforces the downtrend. However, volume has not shown a sharp decline, implying exhaustion is not yet evident. Sustained volume contraction would be required to confirm a potential bottoming process.

Relative Strength Index (RSI)

The RSI is in oversold territory (around 28–30), but historical data shows this level has been reached multiple times without meaningful rebounds. For example, on September 15, the RSI hit 25, yet the price fell further to $71.94. This highlights the cautionary nature of the indicator in strong downtrends, where oversold conditions can persist for extended periods. A bullish reversal would require the RSI to rise above 50 alongside a breakout above key resistance levels.

Fibonacci Retracement

Fibonacci retracement levels drawn from the recent high of $85.37 (September 9) to the low of $69.14 (September 16) identify critical levels. The 38.2% retracement at $76.14 and 50% level at $77.26 are immediate resistance targets. A break above $77.26 could extend the retracement to the 61.8% level at $78.40, but failure to hold $76.14 would likely see a retest of the 23.6% level at $74.89.

Backtest Hypothesis

A backtest of a buy strategy triggered by RSI oversold conditions (RSI < 30) and held for five days from 2022 to 2025 yielded a -2.00% return versus the benchmark’s 48.22%, with a Sharpe Ratio of -0.01 and 48.15% volatility. This underperformance aligns with the observed bearish confluence of moving averages, MACD, and volume. The strategy’s failure likely stems from SATS’ high volatility and event-driven price swings (e.g., spectrum sales, merger rumors), which disrupted short-term RSI-based signals. Integrating Fibonacci and Bollinger Band analysis could refine entry timing, but the current downtrend suggests avoiding oversold-based buying without additional bullish divergences.

Conclusion

The technical landscape for Echostar remains bearish, with multiple indicators converging on a downtrend. While oversold conditions persist, the lack of bullish divergences and weak backtest results caution against relying solely on RSI-driven strategies. Traders should prioritize Fibonacci retracement levels and Bollinger Band breakouts for potential short-term opportunities, while monitoring volume and moving average crossovers for trend confirmation. Long-term investors may benefit from waiting for a clearer reversal signal or fundamental catalysts, such as merger progress or improved liquidity.