Wheaton Precious Plunges 15.63% on Two-Day Slide Breaks Below 200-Day MA as Support Tests $130.33

Wheaton Precious (WPM) has experienced a sharp decline, falling 13.64% in the most recent session and dropping 15.63% over two consecutive days. This sharp bearish momentum suggests heightened selling pressure, with candlestick patterns potentially forming a bearish engulfing or dark cloud cover formation. Key support levels appear near the January 30 low of $130.33, while resistance is likely clustered around the January 28 high of $156.30. The recent price action has also invalidated the prior bullish trend, with a breakdown below the 200-day moving average.

Candlestick Theory

The recent price action forms a strong bearish pattern, with the January 30 session closing at $131.87 after a 13.64% drop, signaling a potential continuation of the downtrend. Key support levels to watch include the January 30 low of $130.33 and the January 22 low of $137.88. Resistance is likely found at the January 28 high of $156.30 and the January 29 high of $160.36. The formation of a bearish engulfing pattern suggests further downward bias, though a rebound near $130.33 could trigger short-term bounces.

Moving Average Theory

Short-term moving averages (50-day at ~$145.50) have crossed below the 200-day MA (~$119.00), confirming a bearish crossover. The 100-day MA (~$139.00) is also acting as dynamic resistance. The price remains significantly below all major MAs, indicating a strong downtrend. A break above the 200-day MA would be necessary to reestablish bullish momentum, but this appears unlikely in the near term given the current momentum.

MACD & KDJ Indicators

The MACD line has crossed below the signal line with declining momentum, reinforcing the bearish bias. The KDJ (stochastic) indicator shows the %K and %D lines in oversold territory (~15-20), suggesting potential for a short-term rebound. However, the divergence between the KDJ’s oversold reading and the MACD’s bearish crossover implies caution—while a bounce may occur, the overall trend remains downward.

Bollinger Bands

Volatility has increased sharply, with the price testing the lower Bollinger Band (~$130.33). Band contraction observed in late January has now expanded, signaling heightened volatility. A break below the lower band could trigger further selling, but a rebound above the 20-day MA (~$140.00) might temporarily stabilize the price.

Volume-Price Relationship

Trading volume spiked on the recent decline, with 6.38 million shares traded on January 30—a 60% increase from the previous session. This confirms the validity of the downtrend. However, the lack of follow-through volume on subsequent days suggests waning bearish momentum, creating a potential confluence with the KDJ’s oversold condition for a near-term bounce.

Relative Strength Index (RSI)

The 14-day RSI has fallen to ~25, entering oversold territory. While this may signal a short-term rebound, the RSI has not formed a bullish divergence (price lows vs. RSI lows), reducing the probability of a reversal. The RSI remains in a bearish trajectory, suggesting further declines are likely unless a strong bullish reversal occurs.

Fibonacci Retracement

Key Fibonacci levels derived from the January 28 high ($156.30) to January 30 low ($130.33) include 23.6% at $145.50, 38.2% at $141.30, and 61.8% at $134.80. The current price near $131.87 aligns with the 61.8% retracement level, which could act as a critical support. A break below this level may target the 78.6% retracement at $126.00.

Confluence and Divergences
The strongest confluence occurs at $130.33, where Bollinger Bands, Fibonacci 61.8%, and candlestick support align. This level offers a high-probability area for a bounce or consolidation. Divergences exist between the KDJ’s oversold signal and the MACD’s bearish momentum, suggesting a temporary rebound may occur but not a reversal. The RSI’s lack of bullish divergence further underscores the likelihood of continued selling pressure.

Conclusion

Wheaton Precious is in a confirmed downtrend, supported by bearish moving averages, MACD, and candlestick patterns. While the RSI and KDJ suggest a potential short-term bounce near $130.33, the broader technical picture favors further declines. Traders should monitor the 61.8% Fibonacci level and Bollinger Band for potential entry points, with tight stop-loss placement below key support.