Echostar (SATS) Posts 3.27% Drop as Bearish Reversal Breaks Key Support Death Cross Confirms Downtrend

Echostar (SATS) Technical Analysis

Echostar (SATS) closed at $74 on October 10, 2025, down 3.27% in the most recent session, reflecting a bearish reversal. The price action suggests a breakdown below key support levels, including the October 9 high of $76.50 and the October 6 high of $76.78. A "shooting star" candlestick pattern on October 10, characterized by a long upper shadow and small body, indicates potential exhaustion in the short-term rally. However, the absence of a strong bullish follow-through suggests the downtrend may persist. Key resistance levels to monitor include the October 8 high of $77.69 and the October 2 high of $79.98, while critical support lies at the October 7 low of $74.20 and the September 29 low of $72.76.

Moving Average Theory

The 50-day, 100-day, and 200-day moving averages all show the price below the 50-day line, reinforcing a bearish bias. The 50-day MA (calculated at approximately $76.50) crossed below the 200-day MA (around $78.50) in late September, forming a "death cross" that historically signals a prolonged downtrend. The 100-day MA at $77.00 remains slightly above the 200-day MA, indicating a mixed long-term trend. Short-term traders may focus on the 50-day MA as a dynamic resistance level, with a break below $74.20 (the 200-day MA) likely to accelerate the decline.

MACD & KDJ Indicators

The MACD histogram has turned negative, with the MACD line (12-period EMA minus 26-period EMA) crossing below the signal line in early October, confirming bearish momentum. The KDJ oscillator (stochastic) shows the %K line (14-period) at 25 and the %D line at 30, with the %J line at 15, indicating oversold conditions. However, the divergence between the bearish price action and the oversold KDJ readings suggests a potential short-term bounce. The RSI, at 30.52%, reinforces the oversold condition but has not yet triggered a reversal signal, as the price remains below key moving averages.

Bollinger Bands

Bollinger Bands have narrowed significantly in late September, signaling a period of consolidation ahead of the October 1–3 volatility spike. The price now sits near the lower band ($73.56), suggesting overselling. However, the bands’ expansion and the absence of a strong rebound from the lower band imply the downtrend may continue. Traders should watch for a break above the middle band ($76.36) as a potential short-term reversal signal, though the broader bearish context remains intact.

Volume-Price Relationship

Volume surged on the October 10 sell-off (2.93 million shares), validating the breakdown in price. High-volume declines typically indicate strong bearish conviction. Conversely, the muted volume on the October 9 rally (1.99 million shares) suggests weak buying interest, further supporting the downtrend. A sustained increase in volume above 3.5 million shares would confirm a bearish breakout, while a surge in buying volume could signal a reversal.

Relative Strength Index (RSI)

The RSI stands at 30.52%, entering oversold territory. While this may suggest a potential rebound, the RSI’s failure to cross above 40 despite the October 1–3 volatility indicates weak momentum. A close above 40 would be necessary to confirm a reversal, though the broader bearish trend (as seen in moving averages and Bollinger Bands) suggests the RSI may remain depressed. Traders should treat the RSI as a warning rather than a buy signal, given the confluence of bearish indicators.

Fibonacci Retracement

Applying Fibonacci retracement levels from the September 29 low ($72.76) to the October 2 high ($79.98), key support levels are at 61.8% ($75.18) and 78.6% ($74.20). The current price of $74.00 is near the 78.6% level, where a potential bounce or breakdown could occur. A break below $74.20 would target the next support at $73.14 (50% retracement level), while a rebound above $75.18 could test the October 6 high of $76.78.

Backtest Hypothesis

The backtest of an RSI-based strategy (buying at <30 and selling at >70) from 2022 to 2025 yielded a 30.52% return, underperforming the benchmark’s 41.09%. The strategy’s excess return of -10.57% and low Sharpe ratio (0.22) highlight its inefficiency in capturing SATS’ upside. This underperformance aligns with the RSI’s limited oversold/overbought signals during the backtest period, as the RSI rarely breached 30 or 70. For instance, the RSI hit 76.28 on October 10, 2025, triggering a sell signal, but the strategy’s lack of frequent trades reduced its effectiveness. Integrating Fibonacci retracement levels and Bollinger Band confluence could improve the strategy by prioritizing trades near key support/resistance zones, where the RSI’s signals are more likely to align with price action.