Stellantis Shares Drop 23.69% in Two Days 28.84% Loss as Technical Indicators Signal Deepening Sell-Off

Stellantis (STLA) has experienced a sharp decline in recent trading sessions, with a 23.69% drop on the most recent day and a cumulative 28.84% loss over two days. This pronounced bearish momentum underscores a critical juncture in its technical profile, warranting a detailed evaluation across multiple analytical frameworks to assess potential near-term scenarios.

Candlestick Theory

The recent price action for Stellantis reflects a strong bearish bias, characterized by a two-day engulfing pattern. The first session closed at 9.54 after a 6.74% decline, followed by a 23.69% drop to 7.28, forming a deep bearish candlestick with a wide range (7.03–9.82). This pattern suggests aggressive profit-taking or panic selling, with key support levels emerging around the 7.03 intraday low. Resistance appears at the prior swing high of 9.87 (February 1st), where multiple candlesticks showed failed attempts to break above. A breakdown below 7.03 may trigger further short-term selling pressure, while a rebound above 9.87 could signal a potential reversal, though the current bearish momentum suggests a higher probability of continuation.

Moving Average Theory

Short-term and long-term moving averages reinforce the bearish trend. The 50-day MA (calculated at ~10.50) is well below the 200-day MA (~10.20), forming a death cross. The 100-day MA (~10.40) also lies above the 50-day MA, indicating a steepening bearish slope. The current price of ~7.28 is significantly below all three averages, highlighting an oversold condition. A retest of the 200-day MA may occur, but given the magnitude of the recent drop, a bounce to the 50-day MA seems unlikely without a broader market catalyst. This alignment of moving averages suggests a high probability of continued downward drift until the price stabilizes above the 200-day MA.

MACD & KDJ Indicators

The MACD histogram has turned sharply negative, with the MACD line crossing below the signal line, confirming bearish momentum. The KDJ indicator (Stochastic) shows the RSI at 15 (oversold territory), with %K and %D lines trending lower, indicating exhaustion in the short-term rally. However, divergence between the KDJ and price action is notable: while the RSI remains oversold, the price has not shown a definitive bottoming pattern. This suggests a high likelihood of further decline before any potential rebound, though a rapid reversal could occur if the 7.03 support holds and volume spikes on bullish follow-through.

Bollinger Bands

Volatility has expanded significantly, with the recent price drop pushing the lower band to ~6.80. The current price of ~7.28 is near the lower band, indicating extreme bearish pressure. The bands’ contraction phase occurred in late January, followed by a breakout to the downside, suggesting the current move is part of a larger bearish trend. A retest of the lower band may occur, but without a meaningful rebound above the 20-day MA (~8.00), the bands are likely to continue widening, reflecting sustained volatility.

Volume-Price Relationship

Trading volume has surged during the recent decline, with the most recent session’s volume (93 million shares) being ~4.8x the 30-day average. This high-volume sell-off validates the bearish move, suggesting strong conviction among sellers. However, a subsequent drop in volume during a potential rebound could signal waning momentum. The current volume profile implies that the short-term downtrend is structurally robust, though a spike in buying volume at key support levels (e.g., 7.03) may hint at accumulation.

Relative Strength Index (RSI)

The RSI has plunged below 30, entering oversold territory, with a reading of ~15. While this typically signals a potential reversal, the RSI’s failure to form a bullish divergence (price lows below previous lows while RSI fails to new lows) suggests the downtrend may persist. A rebound above 40 would be necessary to alleviate oversold conditions, but this is contingent on a broader market upturn or sector-specific catalysts.

Fibonacci Retracement

Key Fibonacci retracement levels derived from the recent high (14.28 in February) and low (7.03) provide critical reference points. The 61.8% retracement level (~9.30) has already been breached, with the next major support at the 50% level (~10.65). A breakdown below 7.03 would extend the correction to the 78.6% level (~6.80), while a rally above 9.30 could trigger a test of the 38.2% level (~11.65). The confluence of Fibonacci levels with Bollinger Bands and moving averages below 10.50 suggests a high probability of continued bearish action.