Elevance Health Stock Jumps 6.4% In Two Days As Bullish Signals Emerge

Candlestick Theory
Elevance Health's recent candlestick patterns reveal meaningful signals. The stock formed consecutive bullish candles on August 7th and 8th, 2025, with the latter registering a 3.71% gain on elevated volume. This two-day rally of 6.40% suggests strong buying interest after testing support near $273.71. Key resistance is now established at the recent swing high of $295.18 (August 8th), while support lies at $278.20 (August 7th low). A decisive break above $295 may trigger further upside, though the long upper wick on August 8th indicates selling pressure at higher levels.
Moving Average Theory
The moving averages depict a bearish trend structure. Current price ($293.99) trades below all key SMAs, with the 50-day SMA (estimated ~$335) acting as dynamic resistance. The 100-day (~$365) and 200-day (~$400) SMAs slope downward, confirming the long-term downtrend. While the short-term rebound is notable, sustained recovery would require conquering the 50-day SMA. Until then, the MA alignment favors bearish sentiment.
MACD & KDJ Indicators
MACD shows early bullish momentum, with the histogram turning positive as the MACD line crosses above the signal line on August 8th. KDJ metrics reinforce this shift: The K-line (73) and D-line (65) are rising toward overbought territory (J-line at 89), suggesting strengthening short-term momentum. However, MACD remains in negative territory, implying this could be a counter-trend bounce within the broader downtrend unless follow-through materializes.
Bollinger Bands
Bollinger Bands reflect contracting volatility, with the bandwidth narrowing to multi-week lows. Price is challenging the middle band ($285 estimated) after rebounding from the lower band, signaling reduced bearish pressure. A sustained move above the middle band may target the upper band (~$310). The volatility squeeze heightens the significance of a breakout above $295 resistance.
Volume-Price Relationship
Volume analysis supports the recent rally. August 8th's 6.4% two-day gain occurred on above-average volume (2.4M shares vs. 30-day avg ~2.2M), confirming buyer conviction. Earlier sell-offs (e.g., July 17th’s -12.22% on 7.4M shares) saw panic-level volume, establishing capitulation points. Current volume expansion on advances suggests potential continuation, though resistance tests require volume validation.
Relative Strength Index (RSI)
RSI (14-period) has risen to ~60, exiting the oversold zone (<30) tested in late July but not yet overbought (>70). This mid-range positioning allows room for further upside. The July oversold reading (RSI ~28) aligned with a price low of $274.04, reinforcing its role as a momentum trough. RSI divergence is absent, suggesting alignment with price action.
Fibonacci Retracement
Applying Fibonacci to the April 10th high ($551.09) and July 17th low ($274.04): The 38.2% retracement ($366) aligns with the 50-day SMA resistance. The 50% level ($412) converges with the 200-day SMA. Recent rebounds peaked near the 23.6% retracement ($304), which now serves as interim resistance. The $295–$304 zone represents a critical barrier for trend reversal confirmation.
Confluence and Divergence
A notable confluence exists at $295–$304, where price resistance, Fibonacci levels, and Bollinger Band constraints intersect. Bullish consensus appears via MACD/KDJ momentum shifts and volume-backed rallies. However, the overarching downtrend (validated by moving averages) creates divergence, as long-term indicators remain bearish despite short-term strength. This tension suggests cautious optimism: While near-term upside toward $310 is plausible, the $335–$365 resistance zone (50/100-day SMAs + 38.2% Fib) remains a formidable ceiling. Investors should monitor $295 for breakout confirmation or rejection, with probabilistic support at $278.