STMicroelectronics Shares Slide 3.4% As Bearish Signals Converge At Key $31.50 Support

Candlestick Theory
STMicroelectronics' recent price action displays a bearish engulfing pattern on July 8–9 (32.52 close → 31.97 close), suggesting rejection near the $32.30 resistance. Key support emerges at $31.50 (tested repeatedly June 23–30 and July 2–3), where three consecutive long lower wicks indicate buying interest. Resistance remains firm at $32.60–32.70 (July 8 high and June 24 peak). The current retreat below $32 confirms near-term selling pressure, with $31.50 acting as a critical support pivot.
Moving Average Theory
The 50-day moving average (approximating $30.80) slopes upward, reflecting improving medium-term momentum. However, the current price ($31.97) sits below the 100-day MA (~$29.50) and 200-day MA (~$27.50), indicating broader bullish sentiment. Confluence at $31.50–31.60 (200-day MA and recent swing lows) offers strong support. Failure here may trigger a test of the ascending 50-day MA, while reclaiming $32.60 could signal bullish resumption.
MACD & KDJ Indicators
Recent MACD histogram bars show shrinking upward momentum, with a potential bearish crossover imminent below the signal line. KDJ readings (K: ~45, D: ~55, J: ~35) exit overbought territory but lack oversold conviction. While no confirmed bearish divergence exists, weakening momentum aligns with the price retreat. KDJ's position suggests further consolidation is likely before directional conviction returns.
Bollinger Bands
Volatility contracted significantly around $31.50–32.50 in early July, culminating in a brief breakout above the upper band on July 8. The subsequent rejection and close back within the bands indicate exhaustion. Price now tests the middle band (~$31.60), coinciding with the key $31.50 support. A sustained break below may target the lower band near $30.50, while holding the middle band could precede range-bound trading.
Volume-Price Relationship
Notable volume surges validate key movements: the 10.67% rally on June 4 (13.75M shares) confirmed accumulation, while the July 2 rebound on 8.99M shares supported a reversal. However, the July 8 advance occurred on lower volume than the preceding July 3 decline (7.72M vs. 8.99M), signaling weak buying conviction. Recent distribution near $32 suggests resistance strength. Sustained bullish reversals require volume expansion.
Relative Strength Index (RSI)
The 14-day RSI (~48) trends downward after peaking near 62 on July 8, reflecting easing upward momentum without reaching oversold territory. RSI exited overbought conditions (>70) after the June surge, supporting healthy consolidation. Current neutrality implies balanced supply/demand, though a drop below 40 could signal escalating selling pressure. As a lagging indicator, RSI warrants correlation with price structure.
Fibonacci Retracement
Applying Fib levels from the April 10 trough ($18.93) to the July 25 peak ($33.99) reveals critical retracement zones. The 38.2% retracement ($27.90) aligned with the May consolidation, while the 50% level ($26.50) marked the June bottom. Current price hovers near the 61.8% retracement ($31.50), a confluence zone with the 200-day MA and volume-based support. Holding $31.50 is crucial for maintaining the uptrend; a breakdown may target $29.50 (78.6% retracement).
Confluence and Divergence Notes
Significant confluence exists at $31.50, where candlestick support, the 200-day MA, Bollinger middle band, and the 61.8% Fibonacci level converge. This zone must hold to prevent a deeper correction. A mild divergence is noted between price (lower highs since July 8) and volume (declining on up days), suggesting waning bullish momentum. MACD/KDJ momentum decay supports this caution, though no strong bearish divergence is yet evident. Near-term bias leans neutral-to-bearish below $32.60, with a decisive break below $31.50 potentially accelerating selling toward $30.00–30.50.