Alcon Plunges 10% On Triple Average Volume As Technicals Signal Bearish Continuation

Alcon (ALC) declined 10.08% in the most recent trading session, closing at 81.04 on significantly elevated volume of 8.76 million shares. This substantial drop warrants a thorough technical assessment of the stock’s current position and potential future movements.
Candlestick Theory
The recent 10% down candle with an extended lower wick (81.015 low vs. 84.18 high) suggests intense selling pressure followed by minor intraday recovery. This bearish marubozu-like formation near the year’s low indicates strong downward momentum. Critical support now resides at the psychological 80.00 level, which aligns with the 2024-08-21 low of 93.39 (before reverse split adjustments). Immediate resistance emerges at the prior session’s low of 88.47, with stronger resistance near 90.41–92.22, a zone that capped advances three sessions prior to the collapse.
Moving Average Theory
Alcon’s price has decisively broken below all major moving averages (50D, 100D, 200D), confirming a bearish structural shift. The 200D MA had been flattening near 89.50 before the breakdown, while the 50D accelerated downward after crossing below the 100D MA in late July. This alignment—price below all three averages with shorter averages accelerating downward—demonstrates entrenched bearish momentum. Each MA now serves as dynamic resistance, with the closest at the 50D (near 86.00).
MACD & KDJ Indicators
The MACD histogram shows increasing negative momentum, with both signal line and MACD below zero and diverging. The KDJ’s K-line (12) and D-line (18) are deeply oversold below 20, though J-line (-1) signals potential for continued downside. While these readings indicate extreme bearish pressure, KDJ’s position near historical lows during May’s 6.45% drop warns against premature reversal expectations. Bearish MACD trend dominance and lack of positive divergence suggest oversold conditions may persist.
Bollinger Bands
Volatility expanded sharply during the breakdown, with price piercing the lower Bollinger Band (20D SMA ~88.00, 2SD ~83.00). This deviation marks the most significant breach since the May sell-off. Band width surged over 40% intraday, signaling panic selling. While such breaches often precede short-term mean reversion, the absence of preceding contraction suggests this is more likely a continuation pattern than a reversal signal.
Volume-Price Relationship
The 10% collapse occurred on 8.76 million shares—triple the 30-day average volume—validating bearish conviction. This distribution climax contrasts with consistently below-average volume during the August consolidation near 90.00. Downside volume confirms capitulation, though follow-through volume in subsequent sessions will determine sustainability. Historical parallels include the May distribution at 87.24, which preceded continued weakness.
Relative Strength Index (RSI)
The 14-day RSI plunged to 21, reaching its most oversold level since the May bottom. While sub-30 readings typically signal oversold conditions, its predictive power remains unreliable during strong trends as evidenced by May’s five-day extension below 30 before stabilization. Bearish momentum divergence is absent—RSI made concurrent new lows with price—suggesting exhaustion signals remain premature.
Fibonacci Retracement
Applying Fibonacci to the 2024-09-12 high (101.10) and current low (81.015), key retracement levels align with historical friction zones: The 23.6% level (85.75) coincides with the August 7–8 consolidation, while the 38.2% level (88.50) matches multiple July resistance points. The 50% retracement at 91.05 is reinforced by the April high of 92.59. These levels now form critical resistance thresholds where renewed selling pressure may emerge.
Confluence and Divergence
Confluence of bearish signals is pronounced: Breakdown confirmation from candlesticks, volume expansion, and moving averages aligns with oversold but non-divergent momentum readings (RSI, KDJ). Notable divergence appears only in Bollinger Band width (volatility spike), which typically resolves through continued volatility rather than reversal. The simultaneous violation of yearly lows and strategic Fibonacci levels strengthens the bearish case. A sustained move above the 23.6% Fib (85.75) would be needed to suggest stabilization, but current technical positioning favors downside continuation toward 80.00 support.