Diageo Shares Claw Back Losses After Slump to Multi-Year Lows

Shares in Diageo (LON: DGE) have staged a notable recovery after a punishing sell-off earlier this year drove the FTSE 100 drinks giant to its lowest levels in years, with technical indicators now flashing renewed bullish momentum.

The stock plunged sharply in late February, tumbling from around 1,874p to below 1,640p in a single session — a drop of more than 12% — as investors reacted to a disappointing trading update highlighting soft demand across key spirits categories, including tequila and premium whisky.

Selling pressure persisted through March, dragging shares to an intraday low near 1,350p, their weakest level in several years, with the Relative Strength Index (RSI) sinking into deeply oversold territory below 27 — a classic signal that the stock had been sold down too far, too fast.

From that base, Diageo began a steady grind higher through the spring and summer. The rally accelerated dramatically in early August, when the shares gapped up from around 1,655p to nearly 1,790p within two sessions — an 8% surge reportedly linked to bullish broker commentary, including from Jefferies, alongside renewed optimism over cost-cutting and portfolio actions.

That move propelled the stock decisively above its 200-day moving average (around 1,558p), a widely watched technical threshold that often signals a shift from a downtrend to a more constructive footing.

The RSI, which had been pinned near oversold extremes in March, spiked above 73 in early August before cooling to a more neutral 57 as of the latest session, closing near 1,719p — suggesting the rebound, while strong, may be settling into consolidation. Even so, shares remain well below levels seen before the downturn, with analysts split on whether the turnaround has legs.