Li Auto Slumps 4.6% Amid Bearish Technicals Targeting $22.50 Support

Li Auto (LI) declined 4.62% in the most recent trading session, closing at $23.75 amidst weak broader market sentiment. This drop continues a recent pattern of increased volatility following a significant peak in late July 2025. A comprehensive technical analysis incorporating multiple indicators provides insights into potential support, resistance, and future direction.
Candlestick Theory
Recent price action shows bearish dominance. A strong bullish candle on August 13th (+3.79%) was immediately engulfed by a bearish candle on August 14th (-4.62%), forming a bearish engulfing pattern near the $25 psychological resistance. This suggests rejection at higher levels. Key support zones appear near the recent August 12th low of $23.76 and a more significant volume-driven support zone around $22.50 established in early August. Resistance is firm at $25 (psychological/recent swing high), followed by the July peak resistance near $31.10.
Moving Average Theory
The moving averages depict a deteriorating medium-term trend. The 50-day SMA has turned downward and crossed below the 100-day SMA, signaling weakening momentum. Price currently trades below the 50-day, 100-day, and 200-day SMAs, confirming a bearish posture in the near and medium term. The 200-day SMA, while still moderately ascending, is converging towards the price ($23.75 vs ~$24.50 200-day SMA), acting as overhead resistance. Failure to reclaim moving averages reinforces the downtrend.
MACD & KDJ Indicators
The MACD indicator is situated well below its signal line and deep into negative territory, confirming sustained bearish momentum. The histogram shows increasing negative bars, suggesting acceleration to the downside. The KDJ oscillator is deeply embedded in oversold territory (K and D both below 20), reflecting the severity of the recent selling pressure. While such oversold readings can foreshadow exhaustion, they are not reliable reversal signals on their own, especially within a strong downtrend. Currently, both oscillators indicate strong bearish momentum with no confirmed divergence suggesting a reversal yet.
Bollinger Bands
Bollinger Bands have contracted significantly from their widened state during the volatile late July swing, indicating reduced volatility. Price is currently pressing against the lower band ($23.58 on Aug 14th). A sustained break below the lower band could signal a continuation of the downtrend. Conversely, holding near the lower band while volatility remains low might suggest an oversold condition and potential stabilization, but this requires confirmation from price action and volume.
Volume-Price Relationship
Volume analysis reveals distribution patterns. The massive surge in volume on July 29th (over 23 million shares) coincided with a sharp decline (-6.20%), a classic sign of institutional selling. Subsequent rallies, including the August 13th gain, occurred on notably lighter volume than sell-offs, suggesting lack of strong buyer conviction. The most recent decline on August 14th occurred on moderate volume, not as heavy as the capitulation lows in July, possibly indicating diminishing selling pressure at current levels but insufficient to mark a reversal point. Overall volume confirms the downtrend's credibility.
Relative Strength Index (RSI)
The RSI currently reads approximately 42 (estimated from the price data trend and recent closes), placing it in neutral territory but with a downward trajectory. Importantly, during the August rebound attempt (Aug 13th), the RSI formed a lower high compared to the mid-July peak, while price attempted a higher high. This bearish divergence signaled underlying weakness and preceded the current decline. The RSI is not yet oversold (<30), leaving room for potential further downside before warning levels are reached.
Fibonacci Retracement
Applying Fibonacci retracement to the significant upswing from the April lows near $19.00 (Apr 10th low) to the July 29th peak of $31.10 provides critical levels. The 38.2% retracement level sits around $26.50, which was decisively broken recently. The next key support is the 50% retracement level near $25.05. Crucially, the 61.8% Fibonacci retracement level coincides with the strong volume support zone identified in candlestick analysis, clustering around $22.50 ($22.55 precisely). This makes $22.50 a significant potential support target and reversal zone.
Confluence and Divergence
A notable confluence exists around the $22.50 level, where the 61.8% Fibonacci retracement meets significant volume-based support and converges near the still-rising 200-day SMA trajectory. This zone represents a potential target and reversal point should the current downtrend continue. Key divergences include the bearish RSI divergence observed during the August rebound attempt, which warned of underlying weakness despite the price rise, and the persistent oversold KDJ readings amidst sustained selling pressure. The primary trend remains down, supported by moving average resistance, bearish MACD, and distribution volume patterns. A credible reversal signal would necessitate a decisive break above key resistance ($25-$26), confirmed by a surge in volume and bullish indicator crossovers. Until such signals emerge, the path of least resistance appears biased downward, with the $22.50 confluence zone acting as the next significant technical target.