Sun Life Financial Drops 4.02% as Technicals Signal Deepening Bearish Trend

Sun Life Financial (SLF) closed at 62.77 on July 7, 2025, declining 4.02% after trading between 62.36 and 64.47. This sharp drop establishes the immediate context for technical evaluation.
Candlestick Theory
The July 7 session formed a long bearish candle, confirming rejection at the $64.47 resistance after a failed recovery attempt on July 3 (closed at $65.40). This pattern suggests a resurgence of selling pressure. Key support emerges at $62.36 (July 7 low), while resistance consolidates near $64.47–$65.46 (recent highs). The breakdown below the June swing low of $63.77 reinforces bearish control. A sustained close below $62.36 could extend declines toward the $60 psychological level.
Moving Average Theory
The 50-day MA (approximately $63.90) crossed below the 100-day and 200-day MAs (converging near $59.50) in early July, signaling a bearish trend shift. The July 7 close at $62.77 landed decisively below the 50-day MA, confirming short-term weakness. This alignment suggests entrenched selling pressure, with a sustained position below the 50-day MA potentially accelerating declines toward the 200-day MA support zone.
MACD & KDJ Indicators
The MACD histogram turned negative in late June, with the signal line maintaining a bearish crossover—indicating strengthening downward momentum. Meanwhile, the KDJ (9,3,3) shows the K-line at 22 and D-line at 28, both nearing oversold territory but without bullish divergence. The J-line dipped below 20, suggesting exhaustion may develop, but bearish MACD convergence implies further downside before stabilization.
Bollinger Bands
Price breached the lower Bollinger Band (20-day SMA ± 2σ) on July 7, trading near $62.77 against an estimated lower band of $63.20. This deviation signals an oversold extreme. Bollinger Bandwidth contracted 15% in June, indicating reduced volatility preceding the breakdown. A reversion toward the midline near $64.00 could occur, though sustained sub-lower-band trading may foreshadow extended declines.
Volume-Price Relationship
Volume surged to 900,895 shares on July 7—nearly triple the 20-day average—validating bearish conviction. This contrasts with muted volume during the June rebound, underscoring unsustainable upside momentum. The volume spike near $62 supports reinforces this level as critical; failure to hold it on high volume would confirm distribution.
Relative Strength Index (RSI)
The 14-day RSI reads 36, approaching oversold territory but without bullish divergence. RSI peaked at 68 in mid-June but failed to reach overbought levels (>70), reflecting weak prior momentum. While approaching oversold conditions, the absence of divergence suggests caution—RSI could remain depressed in a downtrend before signaling exhaustion.
Fibonacci Retracement
Applying Fibonacci retracement to the swing low of $47.96 (August 7, 2024) and high of $66.81 (June 30, 2025) shows critical levels. The 23.6% retracement at $60.64 aligns with the March 2025 consolidation, serving as primary support. The 38.2% level at $58.22 converges with the 200-day MA, forming a high-probability bounce zone if $60.64 fails. Resistance now rests at the 23.6% level and the recent breakdown point near $64.47.
Confluence and Divergence
Confluence emerges around $58.22–$60.64, where the 38.2% Fibonacci retracement, 200-day MA, and volume-based support may stabilize declines. A noteworthy divergence exists between oversold KDJ readings and bearish MACD momentum, warning against premature long entries. The volume-confirmed breakdown below $64.47 overshadows Bollinger Band oversold signals, prioritizing trend alignment over contrarian indicators. For reversal validation, recovery above $64.47 with supporting volume and MACD reversal would be essential.