Warner Bros Discovery Slumps 3.33% Amid Technical Resistance And Distribution Pressure

Warner Bros Discovery (WBD) declined 3.33% in the most recent session, closing at $10.16 after trading between $10.13 and $10.89 on substantial volume of 58.7 million shares. This movement occurs within a broader context of volatile price action over the past year, necessitating a multi-indicator technical assessment.
Candlestick Theory
Recent candlestick patterns reveal significant volatility, with a long green candle on June 10 (+5.04%) followed by a bearish engulfing pattern on June 12. Key support is established at $10.13 (June 12 low), closely aligning with the psychological $10.00 level. Resistance emerges near $10.89 (June 12 high) and more critically at $11.10 (June 9 high). The successive long-wicked candles indicate persistent indecision, with rejection of higher prices near the $11 zone suggesting distribution pressure.
Moving Average Theory
The 50-day MA (approximately $9.35) maintains upward slope beneath current price, supporting intermediate bullish bias. However, the 100-day MA ($9.20) and 200-day MA ($8.80) exhibit flatter trajectories, reflecting longer-term consolidation. Most notably, the current price hovers below all three primary moving averages ($10.16 < 50/100/200-day), indicating weak near-term structure. A sustained break below the 50-day MA would signal bearish momentum acceleration.
MACD & KDJ Indicators
MACD histogram shows fading bullish momentum after a minor positive crossover in early June, now approaching neutral territory. Meanwhile, the KDJ oscillator presents a bearish signal with the %K line (currently ~45) crossing below %D (currently ~55) from overbought territory (>80 on June 9). This divergence suggests waning upside momentum despite recent price rebounds. Neither indicator yet confirms oversold conditions.
Bollinger Bands
Bollinger bandwidth has contracted 18% over the past week, indicating declining volatility and potential energy accumulation for a directional move. Price currently tests the lower band near $10.13 after rejecting the upper band at $10.89. Historical band touches in April and December preceded significant breakouts, suggesting this compression may resolve imminently. A close below the lower band would signal bearish continuation.
Volume-Price Relationship
The June 9 decline occurred on extreme volume (155M shares), validating that distribution as a resistance anchor. Conversely, the June 10-11 rally saw diminishing volume (71M to 52M shares), undermining its sustainability. Recent selling volume (58.7M shares) notably exceeded the 30-day average, confirming bearish conviction. This volume profile reinforces resistance near $11 while failing to support breakout claims above $10.90.
Relative Strength Index (RSI)
The 14-day RSI oscillates at 48, retreating from neutral territory after failing to breach 60 during early June's advance. This aligns with the recent price rejection near $11, demonstrating insufficient momentum for overbought conditions. While not yet oversold (sub-30), RSI's failure to sustain above 50 during recovery attempts suggests latent bearish pressure. Further support tests could trigger oversold readings.
Fibonacci Retracement
Using the March 31 high ($10.73) and April 10 low ($7.92) as anchor points, key Fibonacci levels emerge. The 38.2% retracement ($9.00) acted as support in May, while the 61.8% level ($9.95) now functions as immediate resistance after being breached this week. The 50% level ($9.32) coincides with the 50-day MA, creating a significant confluence zone. Failure to reclaim the 61.8% retracement suggests incomplete bearish correction.
Confluence and Divergence Observations
Strong confluence exists around the $10.00-$10.13 support zone, aligning the June 12 low, psychological level, and Bollinger lower band. Resistance near $10.89-$11.10 combines candlestick patterns, volume validation, and failed retracement levels. Notable bearish divergence appears between price momentum (higher highs in early June) and RSI/MACD, which registered lower highs. However, KDJ and volume align in signaling distribution pressure near $11. The compression in Bollinger Bands amidst indecisive candles implies imminent directional resolution, with probabilistic bias toward downside absent catalyst-driven volume expansion.