Estee Lauder Shares Jump 5.81% As Technicals Signal Potential Reversal

The Estee Lauder (EL) shares rose 5.81% in the latest session to close at $92.74, rebounding from an intraday low of $91.64 to a high of $95.04 on moderately elevated volume. This price action follows recent volatility, with the stock experiencing a 6.73% decline three sessions prior.
Candlestick Theory
Recent candlesticks reveal a potential bullish reversal pattern. The October 10 session formed a long-bodied bearish candle after breaking below the $88-$90 consolidation zone, followed by a hammer-like formation on October 13 that closed near session highs. This suggests buyers are defending the $85-$86 support level, which aligns with the August 20 low of $84.42. Immediate resistance emerges at $95-$96, a zone tested repeatedly in early October and coinciding with the upper wicks of multiple sessions.
Moving Average Theory
The stock currently trades below all key moving averages, signaling persistent bearish pressure. The 50-day MA (approximately $88 based on recent closes) crossed below the 100-day MA ($90 area) in late September, triggering a Death Cross. More critically, the 200-day MA (around $80) maintains a downward slope from its April peak. For any trend reversal confirmation, EL would need to reclaim the 50-day MA decisively, with consecutive closes above $90.
MACD & KDJ Indicators
MACD shows a potential bullish crossover emerging near oversold territory, with the histogram reducing its negative momentum. KDJ readings exited oversold conditions (K-value <20) in the latest session, with the %K line crossing above %D. This alignment suggests waning downward momentum. However, both indicators remain below their signal lines, requiring further confirmation for reversal validity.
Bollinger Bands
Bollinger Bands expanded sharply during the October 10 sell-off, indicating volatility surge. Price recently bounced off the lower band ($86 area), retracing toward the 20-period midline ($90). The bands remain wider than the 60-day average, suggesting ongoing volatility. A sustained move above the midline would be necessary to indicate bullish bias. Upper band resistance converges with key $95-$96 price resistance.
Volume-Price Relationship
The October 10 breakdown occurred on the highest volume in 20 sessions (4.18M shares), confirming bearish conviction. While the recent 5.81% rally saw substantial volume (3.67M), it failed to exceed the down day's volume, raising sustainability concerns. Significant volume spikes accompanied major trend reversals historically – notably the August 20 low (12.99M shares) and April 3 breakdown (11.32M) – underscoring volume's role in validating pivotal moves.
Relative Strength Index (RSI)
The 14-day RSI rebounded from near-oversold territory (31.6) to 44.8 after the latest rally, eliminating immediate oversold conditions. While momentum has improved, it remains below the neutral 50 level. During the June upswing, RSI consistently held above 50 during advances, suggesting the current reading may need to breach this threshold to confirm sustainable recovery. No divergence is observed versus price action.
Fibonacci Retracement
Applying Fibonacci to the April-June rally (trough: $52.51 on April 21, peak: $96.50 on October 9) yields critical levels. The recent $85.24 low held precisely at the 61.8% retracement ($85.30), a key harmonic support. The 50% retracement ($74.50) now serves as major long-term support. Current upside targets include the 38.2% level ($90.90) and 23.6% level ($95.60), the latter converging with the horizontal resistance zone.
Confluence and Divergence Observations
Strong confluence exists at $95-$96, combining horizontal resistance, Bollinger upper band, Fibonacci 23.6% retracement, and prior swing highs. Similarly, the $85-$86 zone integrates multi-touch horizontal support, Fibonacci 61.8% level, and Bollinger lower band. Bullish convergence appears in momentum indicators (MACD/KDJ) and the RSI rebound signaling waning selling pressure. However, volume divergence on the latest up day versus the preceding down day tempers bullish conviction. Moving averages remain bearishly stacked across timeframes, suggesting the current bounce may face resistance near the $90-$92 MA cluster.