STMicroelectronics stock plunges nearly 6% and breaks its support level
STMicroelectronics is facing the strongest pressure on the Paris index this Monday, in a session marked by a particularly tense macroeconomic context. The stock has breached downward a technical threshold that has been monitored for several weeks, worsening an already pronounced decline over the entire month.
STMicroelectronics lagging the CAC 40 with a broken support and accumulating weekly losses
STMicroelectronics drops 5.81% to €42.08 during trading, the largest decline in the CAC 40, in a Paris market retreating 0.83%. The fall is amplified by a downward breach of the €42.22 support: the stock is trading at €42.11, below this threshold now broken. The correction thus exceeds the scope of a simple index decline and takes on its own technical dimension. Over the rolling week, the stock loses 6.08%, and medium-term pressure remains strong with a decline of 11.72% over the month.
The sector of electronic equipment manufacturers listed in Amsterdam shares this negative momentum: ASML Holding drops 5.42% and ASM International loses 8.58% during trading, in a movement affecting the entire European semiconductor supply chain. This Monday falls within a busy day on the monetary front: the Fed meets on Wednesday, the Bank of Japan on Friday, and money markets assess an 85-90% probability of a new 25 basis point increase in Fed funds, against the backdrop of US inflation remaining at 3.4% in August. The VIX jumps nearly 14% during trading, reflecting a clear increase in risk aversion.
Still elevated valuation against a quarterly decline of 37.89% and moving averages well above
The quarterly correction reaches 37.89%, a considerable decline that places the stock in a configuration of sustained pressure on its short and medium-term moving averages. The price at €42.08 is below the 20-day MA at €44.17 (gap of 4.73%) and the 50-day MA at €49.14 (gap of 14.37%): two references that form just as many resistances to recovery. Only the 200-day MA at €39.98 remains below the price, offering a long-term floor still intact at approximately 5% below current levels. The RSI at 46 remains in neutral territory, without oversold signals despite the scale of the correction, suggesting that technical pressure has not yet been exhausted.
On the valuation front, according to the consensus of reviewed analysts, the stock trades at approximately 36.1 times the earnings of the current fiscal year and 18.8 times those of the following fiscal year: multiples still elevated given the correction underway for three months. On the product side, the group announced this morning the launch of the VD56GA, an infrared sensor for the automotive cabin, without this communication stopping today's stock decline. The next resistance level to monitor remains at €49.06, approximately 17% above the current price.
