Estee Lauder Shares Drop 3.67% Amid Bearish Technical Signals And High Volume Selling

The Estee Lauder (EL) shares declined 3.67% to $86.57 on August 20, 2025, marking the third consecutive down day and bringing the three-day loss to 4.84%. This technical analysis evaluates key indicators to assess the stock's current position and probable future direction.
Candlestick Theory
Recent candlestick patterns for The Estee Lauder suggest bearish momentum, with three consecutive long red candles indicating strong selling pressure. The price action has breached several intraday support levels, and the absence of clear reversal patterns such as hammers or engulfing patterns implies potential continuation of the downtrend. Key resistance is now evident near the $89.80 level (the high of the latest session) and further at $91.61. Support may be tested at the recent low of $84.42, which aligns with the swing low established in early July around $84.50.
Moving Average Theory
The stock's moving average configuration reflects a weakening trend. The current price ($86.57) is trading below the 50-day moving average (estimated near $88) and the 100-day moving average (approximately $87), indicating short-term bearishness. The 200-day moving average (roughly $78) remains below the current price, providing long-term support. However, a bearish crossover is emerging as the 50-day SMA has likely crossed below the 100-day SMA, signaling a potential downtrend acceleration if confirmed.
MACD & KDJ Indicators
The MACD indicator is in bearish territory, with the MACD line situated below the signal line and both trending downward, suggesting sustained downward momentum. The KDJ oscillator (with K and D typically set to 14 and 3) is approaching oversold levels, with the %K line potentially near 20. While this might hint at an oversold bounce, the absence of bullish divergence and the strong downward momentum warrants caution. The KDJ's bearish cross (as %K crosses below %D) earlier in the decline remains active.
Bollinger Bands
Bollinger Bands show expanding volatility following the sharp price decline, with the price positioned near the lower band. This indicates an oversold condition but could also signal continuation if the bands continue to expand. The bandwidth expansion after a period of contraction (as seen in July) typically precedes strong directional moves, which in this case is downward.
Volume-Price Relationship
Volume trends validate the bearish price action, with the latest session recording the highest volume in over a month at 12.7 million shares, significantly above the average daily volume. This elevated volume on down days points to institutional distribution and reinforces the sustainability of the current downtrend. The volume surge during the decline also diminishes the prospect of a swift reversal.
Relative Strength Index (RSI)
The 14-day RSI is currently estimated at 41, which resides in the neutral zone and avoids oversold territory. While this indicates room for further downside, the indicator has not yet reached the <30 threshold that traditionally signals an oversold bounce. The moderate RSI reading suggests the current downtrend may have further to extend before becoming exhausted.
Fibonacci Retracement
Applying Fibonacci retracement to the major upswing from the November 2024 low of $62.29 to the August 2025 peak of $95.26 reveals critical levels. The current price has breached the 23.6% retracement at $87.48, opening the door to test the 38.2% level at $82.67. For the recent swing high ($95.26) to the current low ($86.57), immediate resistance lies at $88.62 (23.6% retracement). Confluence exists between this $88.62 level and the psychological $90 resistance, creating a challenging barrier for any recovery attempt.
In summary, The Estee Lauder exhibits bearish technical characteristics across multiple indicators, with notable confluence in the $88-90 resistance zone (supported by Fibonacci, moving averages, and recent price action). The high-volume decline and absence of oversold RSI readings suggest the downtrend may persist. Divergence is minimal, though traders should monitor for potential bullish reversal signals near the $84.50 support. Given the confluence of indicators, the path of least resistance appears downward in the near term.