Estee Lauder Plunges 6.05% Amid Bearish Technical Breakdown

Comprehensive Technical Analysis: The Estee Lauder (EL)
The Estee Lauder (EL) declined 6.05% in the latest session, closing at $89.50 after trading between $88.17 and $92.30 on elevated volume, signaling heightened bearish momentum.
Candlestick Theory
Recent sessions reveal a bearish engulfing pattern culminating on August 14th, as the sharp 6.05% decline overwhelmed the prior day’s 3.88% gain. This pattern suggests strong selling pressure near the $95.50 resistance zone, which has capped price advances multiple times since July. Key support now resides at $88.17 (the session low), with a breach potentially extending losses toward the July low of $86.77. Resistance remains firm at $95.50.
Moving Average Theory
The 50-day moving average (MA) has crossed below the 100-day MA, confirming a bearish intermediate trend. Prices currently trade below all key MAs (50-day, 100-day, and 200-day), with the 200-day MA acting as dynamic resistance near $92. This alignment signals sustained downward pressure, reinforcing the long-term bearish structure established since early 2024.
MACD & KDJ Indicators
The MACD histogram shows accelerating negative momentum, with the signal line diverging below the zero boundary. Concurrently, the KDJ oscillator’s %K line (11) and %D line (18) are entrenched in oversold territory but lack bullish convergence. While deeply oversold, neither indicator yet signals a reversal, reflecting persistent selling pressure.
Bollinger Bands
A pronounced band expansion occurred during the August 14th sell-off, with prices piercing the lower Bollinger Band. This volatility spike indicates capitulation, but the close below the lower band may suggest continuation downside. Band width remains elevated, supporting near-term directional momentum.
Volume-Price Relationship
The 6.05% decline was accompanied by a volume surge to 4.57 million shares—40% above the 10-day average—validating bearish conviction. Distribution patterns have dominated since the failed breakout at $95.50 in late July, where high-volume rejections reinforced resistance. Sustained selling volume diminishes recovery prospects.
Relative Strength Index (RSI)
The 14-day RSI (27) resides deeply in oversold territory, below the 30 threshold. While traditionally signaling exhaustion, the lack of bullish divergence and the stock’s strong downtrend imply oversold conditions may persist. Historical parallels (e.g., April 2025) show RSI can remain oversold during capitulation phases.
Fibonacci Retracement
Mapping the June low ($66.94) to the August high ($95.47), the 61.8% retracement ($87.25) aligns with the August 14th low ($88.17). A decisive close below this level would expose the 78.6% retracement at $83.80. The $87–$88 zone now acts as critical Fibonacci support.
Confluence and Divergence
Significant confluence exists around the $87–$89 support band, where Fibonacci levels, the July swing low, and oversold RSI converge. A breakdown here could trigger accelerated selling. Key divergence is noted between oversold oscillators (RSI, KDJ) and ongoing price weakness—while typical of bearish trends, this divergence heightens reversal potential if bullish catalysts emerge. However, volume, moving averages, and candlestick patterns currently favor downside continuation toward $83–$85.