Allstate Stock Drops 3.31% as Technical Indicators Signal Persistent Bearish Pressure

The Allstate Corporation (ALL) declined by 3.31% in the latest trading session on August 21, 2025, closing at $206.55 after trading between $206.43 and $212.99. This analysis examines the technical indicators to assess the stock's current position and potential future movements.
Candlestick Theory
Recent candlestick patterns reveal a bearish momentum for The Allstate. The August 21 session formed a long red candle closing near its low, indicating strong selling pressure after a rejection at the $213 resistance level. This follows a bearish engulfing pattern on August 20–21, where the red body completely overshadowed the prior day’s green candle. Key support is now established at the July swing low of $180.53, while resistance remains firm near $213–$214, a level tested twice in early June and mid-August without sustained breakout. The failure to breach $213 reinforces this as a critical supply zone.
Moving Average Theory
Moving averages signal deteriorating intermediate and long-term trends. The 50-day SMA ($203.50) has crossed below the 100-day SMA ($205.20), a bearish near-term signal. More significantly, the 50-day and 100-day averages are both trending downward and converging toward the 200-day SMA ($195.80). While the price remains above the 200-day SMA, the compression of these averages suggests weakening momentum. A sustained break below the 200-day SMA would confirm a long-term bearish shift, whereas recovery above the 50-day SMA is needed to stabilize the trend.
MACD & KDJ Indicators
The MACD histogram shows increasing negative momentum, with the MACD line (-1.2) accelerating below its signal line. This bearish crossover aligns with the KDJ indicator, where the K-line (28) and D-line (35) are plunging toward oversold territory after peaking near 85 on August 14. The J-line has entered oversold levels at 15. While both indicators suggest downward pressure is intensifying, the absence of bullish divergences implies limited reversal signals. The MACD’s position below zero reinforces the bearish intermediate trend.
Bollinger Bands
Bollinger Bands reflect rising volatility after a contraction phase. The August 21 close near the lower band ($205) coincides with a band expansion, typically preceding directional moves. This marks the first close below the 20-day moving average ($210) since early August, confirming bearish momentum. Historically, tests of the lower band have triggered minor bounces (e.g., late July), but repeated closes near this level would signal continuation of the downtrend. The bandwidth expansion from 2.5% to 3.2% over three sessions underscores increasing selling pressure.
Volume-Price Relationship
Volume analysis reveals bearish confirmation. The 3.31% decline on August 21 occurred alongside 1.99 million shares traded—32% above the 30-day average—indicating conviction behind the selloff. This follows a pattern of distribution: rallies (e.g., August 20’s 1.54% gain) saw below-average volume, while recent down days attracted higher participation. The volume surge during the July 31 breakout rally (4.54 million shares) now acts as a resistance reference, with subsequent reversals demonstrating insufficient buying interest to sustain advances.
Relative Strength Index (RSI)
The 14-day RSI reading of 38 approaches oversold territory but lacks reversal triggers. This decline from overbought conditions (RSI 72 on August 14) reflects accelerating bearish momentum. While RSI nears the 30 threshold that often precedes bounces, it has not yet established bullish divergence against price. The indicator’s steep descent from mid-August suggests underlying weakness, requiring consolidation near current levels to relieve oversold conditions before any meaningful rebound.
Fibonacci Retracement
Applying Fibonacci retracement to the April–June rally (swing low: $180.53 on April 7; swing high: $212.64 on June 2) reveals critical levels. The 61.8% retracement at $192.50 provided support in late July, but the recent breakdown below the 50% level ($196.60) shifts focus to the 78.6% retracement at $188.80. Confluence exists here as this aligns with the 200-day SMA ($195.80) and the July reaction low ($186.57). A hold above $188.80 would maintain the broader uptrend structure, while failure could retest the April low.
Confluence and Divergence Observations
Multiple indicators converge to highlight $213 as formidable resistance, reinforced by: 1) the August 20 high aligning with June peaks, 2) volume drying up near this level, and 3) bearish rejection candlesticks. Bearish confluence also emerges at the $195–$198 zone, where the 200-day SMA, Fibonacci 78.6% level, and July swing low cluster. A notable divergence exists between price and RSI: the stock’s higher high on August 14 versus early June was not confirmed by RSI (72 vs. 68), foreshadowing the current correction. The absence of bullish divergences in MACD or KDJ suggests downside momentum may persist near-term, though oversold RSI conditions warrant monitoring for stabilization signals.