Mexican Economic Development Drops 3.24% Amid Bearish Technical Signals

Mexican Economic Development (FMX) concluded its latest session at 91.32, reflecting a 3.24% decline, as selling pressure intensified near recent resistance zones. The following technical analysis examines key patterns and indicators to contextualize this movement.
Candlestick Theory
A bearish engulfing pattern emerged on September 16th, with the price opening near 94.60 and closing at 91.32, overshadowing the prior session’s gains. This signals rejection at the 94.60 resistance level. Notable support resides at 91.31 (intraday low) and 86.75 (September 11 low), while resistance converges around 94.60 (September 15 high) and 100.67 (July 11 peak). The current price action near 91.32 tests immediate support, with a breach potentially triggering further downside.
Moving Average Theory
The 50-day moving average (MA) has crossed below the 100-day MA, confirming a bearish intermediate trend. The 200-day MA (approximately 96.50) caps overhead rallies, reinforcing resistance. The latest close (91.32) sits below all three key MAs (50/100/200-day), highlighting entrenched bearish momentum. This alignment suggests continued downward pressure unless reclaimed above the 100-day MA (~93.80).
MACD & KDJ Indicators
MACD lines remain in negative territory with a widening histogram, indicating accelerating bearish momentum. KDJ shows the %K line at 20 and %D at 25, nearing oversold conditions but lacking bullish crossover confirmation. Despite oversold KDJ readings, MACD’s bearish divergence suggests trend persistence, implying further downside risk before stabilization.
Bollinger Bands
Volatility expanded recently as prices breached the lower Bollinger Band (89.50) on September 16th, signalling intensified selling pressure. However, the sharp move outside the band may foreshadow a short-term mean-reversion bounce toward the 20-day moving average (93.50). Sustained trading below the lower band remains unlikely without oversold exhaustion.
Volume-Price Relationship
Volume surged 352% on September 16th relative to the prior session, validating the breakdown. Distribution patterns emerged earlier during resistance tests (e.g., August 21: volume spike at 87.00 resistance). Conversely, volume receded during consolidation near 86.75 support (September 10–11), underscoring vulnerability to breakdowns. Current high-volume selling supports bearish continuation.
Relative Strength Index (RSI)
The 14-day RSI sits at 31, nearing oversold territory but not yet extreme. RSI has consistently rejected overbought (>70) levels since July (e.g., 70.5 on July 17), preceding declines. While the current RSI warns of potential relief rallies, it lacks bullish divergence relative to price, limiting reversal conviction.
Fibonacci Retracement
Applying Fibonacci to the June 18 high (103.29) and September 11 low (86.75) yields key levels: 38.2% (93.50), 50% (95.00), and 61.8% (96.40). The price recently reversed near the 23.6% retracement (92.40), aligning with candlestick resistance at 94.60. Confluence exists between the 38.2% Fib (93.50) and the 100-day MA, creating a critical resistance zone. Downside targets converge at 86.75 (September low).
Confluence and Divergence
Confluence: Bearish agreement is pronounced:
- Resistance at 94.60 (candlestick high) overlaps with the 38.2% Fib and 100-day MA.
- High-volume breakdown and bearish MACD/KDJ reinforce downtrend continuity.
Divergence: KDJ nears oversold levels while RSI approaches 30, hinting at oversold exhaustion, yet no bullish MACD crossover or volume reversal validates recovery prospects.
Summary
Mexican Economic Development exhibits entrenched bearish momentum, validated by multi-indicator confluence and high-volume selling. Immediate support at 91.31 must hold to prevent a retest of 86.75. Relief rallies face layered resistance at 92.40 (23.6% Fib), 93.50 (38.2% Fib + 100-day MA), and 94.60. Traders should monitor RSI/KDJ oversold signals for reversal potential, though prevailing momentum favors continued downside bias unless volume and MACD exhibit bullish divergence.