Wheaton Precious Slides 5.86% In Three Days As Bearish Momentum Intensifies

Wheaton Precious (WPM) declined 3.57% in the most recent session, marking its third consecutive daily loss for a cumulative 5.86% downturn. This price action reflects growing near-term bearish sentiment as the stock retreats from higher levels observed in mid-September.
Candlestick Theory
Recent candlestick patterns demonstrate notable bearish momentum. The current three-day decline forms a "Three Black Crows" pattern, characterized by consecutively lower closes on increasing range. Key resistance now emerges near $108.50 (October 7-9 highs), while support clusters around $102.50 (October 9 low), coinciding with the August 25 swing high. A breach below $102.50 would expose the psychological $100 level, last tested during the August 29 breakout.
Moving Average Theory
The 50-day moving average (circa $98) remains above the 100-day (~$94) and 200-day (~$84), preserving the structural uptrend. However, the recent breakdown below the 50-day MA and accelerating separation suggest deteriorating intermediate momentum. The current price ($103.38) now trades below all three key moving averages on the daily timeframe – a bearish configuration last observed in August during consolidation. The 200-day MA continues rising, providing distant dynamic support.
MACD & KDJ Indicators
MACD exhibits a bearish crossover with the histogram expanding negatively, confirming strengthening downward momentum. Meanwhile, the KDJ oscillator shows the %K line (12) diving below %D (25) near oversold territory (KDJ reading ~20). While this signals potential exhaustion, neither indicator displays positive divergence yet. The confluence of bearish MACD crossover and KDJ oversold plunge suggests continued downward pressure, though traders should monitor for reversal signals if KDJ sustains below 20.
Bollinger Bands
Price has pierced the lower Bollinger Band ($105) amid expanding volatility, typically indicating an oversold extremity. The bandwidth expansion after September’s contraction signals renewed directional momentum – in this case, bearish. Historical reactions near the lower band (e.g., August 26) suggest potential short-term bounces, but sustained trading below the lower band often precedes extended declines if volume confirms.
Volume-Price Relationship
The sell-off’s credibility is heightened by rising volume over the three-day decline, culminating in the highest volume session (2.92 million shares) since September 19. This distribution pattern contrasts with the lighter volume during the early October rebound, indicating weak conviction in prior upside moves. Notable accumulation occurred during the September breakout near $110, which now becomes overhead supply.
Relative Strength Index (RSI)
The 14-day RSI reading (currently ~36) hovers just above oversold territory. While it hasn’t yet breached 30, the sharp descent from neutral levels (55 on October 6) signals accelerating bearish momentum. Historically, WPM has rebounded when RSI reached 30 (August 18), but the lack of positive divergence at this juncture warrants caution before anticipating reversal.
Fibonacci Retracement
Applying Fibonacci levels to the rally from August lows ($76.50) to September peaks ($114) reveals critical thresholds. The 38.2% retracement ($98.80) aligns with the August 29 breakout gap and 50-day MA. This confluence makes $98.80-$100 a high-probability support zone. A violation would target the 50% level ($95.25), corresponding to the volume shelf from late August. The current price sits between the 23.6% ($105.40) and 38.2% retracements, showing vulnerability to deeper pullbacks.
Confluence and Divergence Observations
Significant confluence appears at the $98.80-$100 zone, where Fibonacci, moving average, and historical volume support converge – a critical bull defense area. However, bearish confluence dominates near term through MACD/KDJ momentum alignment and volume-backed breakdown. The primary divergence exists between oversold oscillators (KDJ/RSI) and unabated selling pressure, suggesting that while technically stretched, momentum may override mean-reversion signals in the immediate term. The breach of Bollinger’s lower band alongside bearish moving average stacking indicates continued downside bias unless reclaimed above $105.40.