Brown & Brown Shares Plunge 10.40% Amid Heavy Selling Pressure

Technical Analysis Report: Brown & Brown (BRO)
Brown & Brown shares declined significantly by 10.40% to $91.91 in the latest session, extending a two-day loss of 11.09% amid heightened selling pressure. This drop occurred on elevated volume (~10.4M shares), suggesting strong bearish conviction. Below is a comprehensive technical assessment using the required framework.
Candlestick Theory
The July 29 session formed a long bearish marubozu (no lower wick), signaling intense selling pressure after breaking below key support near $102–$104 (a consolidation zone from late June). This breach transforms the $102–$104 area into new resistance. Previous indecisive candles (dojis and small bodies) near $103.50 on July 22–25 foreshadowed the breakdown, failing to sustain recovery attempts.
Moving Average Theory
The 50-day, 100-day, and 200-day moving averages exhibit a bearish alignment (50-day below 100-day below 200-day), confirming a long-term downtrend. The sharp July 29 close ($91.91) places the price well below all three averages. The 200-day MA (approximated at $108–$110 from historical pivots) now serves as major overhead resistance, reinforcing the bearish bias.
MACD & KDJ Indicators
MACD shows a deepening negative histogram, accelerating bearish momentum after its July crossover below the signal line. KDJ readings are deeply oversold (K and D likely below 20), but no bullish divergence is evident. While oversold conditions may trigger short-term bounces, the momentum indicators lack reversal signals, aligning with the dominant downtrend.
Bollinger Bands
Bands expanded sharply on July 29, reflecting a volatility breakout to the downside. Price penetrated the lower band, often indicating an oversold extremity. However, sustained closes below the lower band typically precede mean-reversion bounces or consolidation—not immediate reversals. The prior band contraction in mid-July highlighted the impending directional move.
Volume-Price Relationship
The breakdown was validated by a volume surge on July 29 (104% above the 30-day average), confirming bearish conviction. Earlier distribution patterns (e.g., June 12 volume spike at $106.80 resistance) signaled weakening upside momentum. Declining volume during minor July rebounds ($103–$104) further undermined recovery sustainability.
Relative Strength Index (RSI)
The 14-day RSI has plunged below 30, indicating oversold territory. While such levels occasionally precede bounces, oversold RSI readings can persist during strong downtrends (e.g., during April’s decline). The lack of bullish divergence suggests continued caution. Traders should monitor for RSI stabilization above 30 to signal exhaustion.
Fibonacci Retracement
Using the March 31 peak ($124.40) and the July 29 low ($91.55), key retracement levels emerge:
- 38.2%: $106.25
- 50%: $107.98
- 61.8%: $109.70
The price is currently below the 23.6% level ($101.65), reinforcing bearish control. A rebound should face resistance near $101.65 (23.6%) and $106.25 (38.2%), aligning with prior support-turned-resistance zones.
Confluence Points & Divergences
Confluence: Multiple signals validate bearish dominance:
1. Price below all key MAs with volume-confirmed breakdown.
2. Oversold but non-divergent RSI/KDJ readings coupled with MACD acceleration south.
3. Bollinger Band expansion supporting continuation patterns.
Divergences: None significant. Momentum and price remain aligned downward.
Conclusion
Brown & Brown exhibits intense bearish momentum, with technical structure (price action, volume, MAs, and oscillators) favoring further downside. While oversold conditions on RSI/KDJ may trigger a technical bounce toward $95–$97 (minor prior lows) or $101.65 (23.6% Fib), the confluence of resistance near $102–$104 and the moving averages limits upside potential. A sustained recovery would require reconquering the 23.6% Fib ($101.65) with volume confirmation. Until then, the path of least resistance remains downward, with a retest of the $91.55 low probable and the $85–$87 zone as a longer-term downside target.