Sea Stock Drops 3.38% As Bearish Momentum Builds Below Key Moving Averages

Sea Group (SE) declined 3.38% in the most recent session, closing at $151.44 after trading between $149.04 and $155.02 on volume of 5.64 million shares.
Candlestick Theory
Recent sessions show emerging bearish momentum, with the current candle closing near its low after rejection at $155.02 resistance. A potential bearish engulfing pattern formed on August 5th as the red candle completely consumed the previous session's green body. Key support is established at $149.04 (today's low), aligning with the psychological $150 level. Resistance remains firm at $155.02 (today's high) and more substantially at the $157-$160 zone, which previously provided support in late July. The July 21st shooting star candle (high: $165.58, close: $155.29) initiated the current downtrend phase.
Moving Average Theory
Sea trades below all critical moving averages: the 50-day ($155.80), 100-day ($159.20), and 200-day ($145.00). Recent bearish crossovers include the 50-day dipping below the 100-day in late July, confirming deteriorating intermediate momentum. The expanding distance between the 50-day and 200-day averages signals strengthening downtrend pressure. The current price sits 4.4% below the 50-day MA, while the 200-day MA near $145 represents the next major support confluence.
MACD & KDJ Indicators
The MACD histogram remains negative (-1.15), though its slope has moderated, suggesting bearish momentum may be stabilizing. The MACD line (-3.20) persists below its signal line (-2.05), maintaining the sell signal initiated in mid-July. KDJ readings show K=18, D=25, J=4 – all in oversold territory, with the J-line divergence hinting at potential short-term exhaustion. However, the absence of bullish crossover in K and D lines warrants caution against premature reversal calls.
Bollinger Bands
Price breached the lower band ($153.50) intraday before closing marginally above it, indicating oversold conditions. Bandwidth expansion accelerated to 18% (from 12% last week), confirming rising volatility. The squeeze resolution in late July favored the downside, with consistent closes below the 20-day moving average ($159.50) validating bearish momentum. Current lower band proximity suggests technical bounce potential, but sustained sub-$153.50 closes increase breakdown risks.
Volume-Price Relationship
Distribution patterns dominate, with the three highest volume days occurring during declines (July 21st: 7.74M shares, -7.87%; August 5th: 5.64M, -3.38%). Downside volume intensity exceeds upside volume during rebounds, confirming seller dominance. The August 4th rally on 2.11M shares shows weak conviction compared to distribution days, undermining recovery sustainability. Volume divergence signals weakness as price tested resistance near $157 with dwindling participation.
Relative Strength Index
The 14-day RSI reads 28.5, entering oversold territory. However, this is the third oversold reading in six weeks, diminishing its reversal predictive power. A nascent bullish divergence emerges as price recorded lower lows since July 18th while RSI formed higher lows, suggesting weakening downward momentum. Confirmation requires RSI breaking above 30 alongside price clearing $155 resistance.
Fibonacci Retracement
Applying Fib levels to the July 18th high ($170.00) and August 5th low ($149.04) shows critical retracement resistance at $153.99 (23.6%), $157.04 (38.2%), and $159.52 (50%). The current close at $151.44 positions Sea below the 23.6% level. Recent failures to overcome the 38.2% retracement during early August rebound attempts strengthen this resistance zone's significance. Confluence exists at $157, where Fibonacci levels overlap with the 100-day moving average and prior support.
Confluence occurs with multiple indicators signaling oversold conditions (Bollinger Band breach, sub-30 RSI, and KDJ extremes), suggesting heightened bounce probability near $149 support. However, bearish confluence dominates through moving average alignment, MACD momentum confirmation, and volume distribution patterns. The critical divergence between oversold oscillators and sustained price weakness warrants caution – any technical rebound must reclaim $157 (38.2% Fib and 100-day MA) to suggest trend reversal potential. Failure to hold $149 risks testing the 200-day MA support at $145.00.