KB Financial Group Plunges 4.92% as Bearish Engulfing Pattern Signals Downtrend Continuation

Technical Analysis of KB Financial Group
Candlestick Theory
KB Financial Group's recent candlestick action reveals critical technical levels. The 4.92% decline on July 25, 2025, formed a long red candle closing near its low ($85.91), erasing the prior session’s 7.26% gain. This price rejection near the $92.38 high establishes immediate resistance at $92.40. Key support emerges at $81.50 (July 16 low), reinforced by the February swing low of $60.05. A bearish engulfing pattern completed on July 25, coinciding with high volume, signals strong selling pressure. The failure to sustain above $87.80 resistance (July 8 peak) further validates bearish momentum, making $85.65 the critical near-term support to monitor.
Moving Average Theory
The moving average configuration shows deteriorating trend strength. The 50-day MA (currently near $78.50) crossed below the 100-day MA ($75.80) in early June, while both remain beneath the declining 200-day MA ($68.20). This "death cross" alignment signals entrenched bearish momentum. Prices are trading 14% below the 200-day MA, confirming long-term downtrend continuation. Recent rejections near the 50-day MA highlight its role as dynamic resistance. Sustained trade below all three major averages (50/100/200-day) underscores dominant selling pressure.
MACD & KDJ Indicators
MACD (12,26,9) exhibits bearish divergence, with the July 24 price peak at $92.38 occurring alongside a lower MACD histogram peak versus early June. The signal line remains below zero, reflecting persistent bearish momentum. KDJ readings show the %K line (18) plunging below %D (35) from overbought territory (July 24: K=82/D=75), triggering a sell signal. The J-line’s dive to -16 indicates extreme downside momentum. Neither oscillator shows bullish reversal signs currently.
Bollinger Bands
Volatility expansion is evident as July’s 44% price swing breached the upper band ($92.38 on July 24) before sharply reversing to tag the lower band ($85.65). The 20-day band width widened by 38% during this move, confirming high volatility. Price now trades below the middle band (20-day SMA ≈$87.00), suggesting bearish bias. The band squeeze preceding July’s volatility explosion resolved downward, implying further downside potential. The lower band near $84.40 now offers interim support.
Volume-Price Relationship
Distribution patterns are evident, with July 25’s decline occurring on 478k shares – 128% above the 30-day average – confirming capitulation. The preceding rally to $92.38 (July 24) saw volume spike to 981k shares, but close beneath the day’s midpoint, indicating absorption by sellers. Notable bearish volume divergences preceded the breakdown: the July 8 peak at $89.45 occurred on 424k shares versus 573k during the April $67.55 advance. Declining volume during August bounces signals weak demand.
Relative Strength Index (RSI)
The 14-day RSI plunged to 28.6 on July 25, entering oversold territory for the first time since January. However, oversold conditions may persist during strong downtrends. Bearish divergence emerged in late July as prices challenged $92 with RSI at 68 versus the 72 reading during the April peak. Failure to breach 70 despite multiple rally attempts since March demonstrates weakening momentum. Oversold readings warrant caution as they precede potential rebounds, though trend alignment remains downward.
Fibonacci Retracement
Applying Fibonacci to the April-July swing (low: $60.05 April 25, high: $92.38 July 24) shows critical confluences. The 38.2% retracement at $80.10 aligns with the June consolidation zone. The 50% level at $76.20 intersects the 100-day MA and May support. The 61.8% retracement at $72.36 converges with the 200-day MA. The sharp rejection from the 127.2% extension ($94.60) confirms technical resistance. Current price tests the 23.6% retracement ($87.90), which now serves as resistance.
Confluence and Divergence
Strong confluence exists around $80.00, combining the 38.2% Fibonacci level, 100-day MA, and horizontal volume support. The oversold RSI and KDJ readings diverge from MACD’s sustained bearishness, reflecting mixed momentum signals. Bearish volume confirmation during breakdowns outweighs oversold oscillator readings within the dominant downtrend. Failure to reclaim $87.90 resistance on volume would validate bearish continuation toward the $80.10 confluence zone.