Telefonica Dips 0.38% as Technicals Show Fragile Support at 5.20

Telefonica (TEF) declined by 0.38% in the most recent session, closing at 5.24. This analysis integrates multiple technical perspectives to evaluate the stock’s trajectory and key levels.
Candlestick Theory
Recent price action shows consolidation near the 5.20–5.30 zone, with multiple doji formations in June 2025 signaling indecision. The 5.20 level has emerged as critical short-term support, tested three times in the past month. Resistance is firm at 5.37 (June 2025 high), while a sustained break below 5.20 may trigger further downside toward the April 2025 trough near 4.87.
Moving Average Theory
The 50-day MA (~5.10) remains above the 200-day MA (~4.75), confirming an intermediate bullish trend. However, the price has recently crossed below the 100-day MA (~5.15), indicating near-term weakness. The convergence of the 50-day and 100-day MAs around 5.12–5.15 could act as a pivotal zone; sustained trading below this area would signal deteriorating momentum.
MACD & KDJ Indicators
MACD is marginally bearish, with the histogram in negative territory but narrowing, suggesting weakening downward momentum. KDJ readings (K: 42, D: 38, J: 50) are neutral but rising from oversold conditions earlier in June. This configuration implies potential for a short-term rebound, though neither oscillator currently signals a strong reversal catalyst.
Bollinger Bands
Volatility contracted significantly in late May 2025 (bandwidth narrowed 15%), preceding the current sideways movement. Price is now testing the lower Bollinger Band near 5.19, while the upper band at 5.43 defines resistance. A break outside the bands would likely signal directional acceleration, with downside risk toward 5.00 if 5.19 fails.
Volume-Price Relationship
Down days in early June 2025 saw higher volume (e.g., 804k shares on June 10), confirming selling pressure. Conversely, rallies from mid-May lacked volume confirmation. The most recent decline occurred on moderate volume (613k shares), suggesting limited capitulation. Volume patterns generally support further consolidation rather than decisive directional movement.
Relative Strength Index
The 14-day RSI (52.1) is neutral, recovering from a near-oversold dip to 42 in late May. While the May rally peaked with RSI near 70 (overbought), subsequent pullbacks haven’t reached oversold territory (<30). This reflects a structurally intact trend but warns that bullish momentum remains capped.
Fibonacci Retracement
Applying Fib levels to the March–May 2025 rally (swing low 4.35 to high 5.37):
- The 38.2% retracement (5.04) was breached in May.
- The 50% level at 4.86 aligned perfectly with the May reversal point.
- Current price hovers near the 23.6% retracement (5.17), which now acts as resistance.
A close below 5.20 would expose the 61.8% level at 4.69.
Confluence and Divergences
Confluence appears at 5.15–5.20, where the 100-day MA, 23.6% Fib level, and Bollinger support intersect — a decisive break here would carry directional significance. Notable bearish divergence occurred in late May when KDJ peaked while prices made marginal new highs. Currently, MACD/RSI alignment suggests neutral-to-rangebound conditions.
In conclusion, Telefonica shows technical fragility near the 5.20 support. While moving averages retain a bullish bias, volume and candlestick patterns indicate demand shortage. A breakdown below 5.19–5.20 could accelerate selling toward 5.00–4.86, whereas recovery above 5.30 is needed to restore upside momentum.