Heico Plunges 4.70% After 8.78% Rally As Technicals Signal Volatile Consolidation

Heico (HEI) fell 4.70% in the latest session, closing at 316.56 after trading between 316.51 and 336.44 on volume of 683,115 shares. This follows an 8.78% surge the previous day, creating a volatile technical backdrop requiring multi-faceted analysis.
Candlestick Theory
The 4.70% decline on August 27 formed a bearish engulfing pattern after the prior session's bullish spike, signaling potential exhaustion near the 338.23 resistance (August 4 peak). Key support emerges at 304.39–310 (August 25 low and August 5 swing) and resistance at 333.31–336.44 (recent highs). The rejection at 336.44 reinforces the significance of the 338.23 multi-month ceiling.
Moving Average Theory
The 50-day MA (313.8) currently under pressure aligns with the 100-day MA (307.4) to form dynamic support. While the 200-day MA (284.5) maintains a bullish slope, the short-term trend shows vulnerability as price tests the 50-day MA. Crossovers suggest emerging consolidation, with a sustained break below 313 potentially triggering a deeper test of the 100-day MA.
MACD & KDJ Indicators
MACD shows a bearish signal line crossover below zero, diverging from the August 26 price surge and indicating fading momentum. KDJ confirms overbought conditions unwinding, with the J-line plunging from 92 to 25—supporting near-term corrective pressures. Confluence exists in these oscillators suggesting waning bullish energy following the rejection at resistance.
Bollinger Bands
Price exited the upper band on August 26 (333.31) before collapsing toward the 20-day SMA (323.5) and middle band. The 5.4% band width contraction indicates subdued volatility, with the current test of the middle band pivotal. A breakdown could target the lower band near 303.6, whereas holding may signal range-bound action between 304 and 333.
Volume-Price Relationship
The 8.78% August 26 rally occurred on 1,114,200 shares—63% above the 20-day average—validating bullish enthusiasm initially. However, the subsequent 4.70% drop on volume 11% below average signals weak conviction in the breakdown. This divergence warrants monitoring for follow-through selling volume.
Relative Strength Index (RSI)
The 14-day RSI (46) cooled sharply from 62 after briefly approaching overbought territory (69 on August 26). While neutrality dominates the oscillator, the rapid retreat from overbought levels echoes August 5’s failed breakout. RSI’s failure to sustain above 50 warns of accumulation-distribution imbalances, though not yet oversold.
Fibonacci Retracement
Applying Fibonacci to the major swing from 248 (August 28, 2024 low) to 338.92 (August 5 peak), the 38.2% retracement (304.2) aligns with crucial support. The 61.8% level (316.6) of the secondary swing from 280.5 (May 28 low) to 338.92 was precisely tagged at the latest close (316.56). This confluence reinforces 316–317 as a pivotal zone; failure here opens 304.2 (38.2%) and 293.4 (50%) retracements.
Confluence and Divergence
Confluence exists around 316–317 (Fibonacci level, 50-day MA, and Bollinger middle band) as a critical pivot. Bearish divergences include MACD momentum fading during price highs and the volume-supported rally failing to breach overhead resistance. However, the 200-day MA’s ascending trajectory and 100-day MA support cushion longer-term damage unless 304 support ruptures.
Probabilistic conclusion: Multiple indicators point to fragile price action near resistance, though Fibonacci alignment with key MAs and volume profile imply the 304–317 range may contain short-term movement. A decisive close below 313 would reinforce bearish control, targeting 304. Reclaiming 330 remains necessary to rejuvenate the uptrend.