Li Auto Stock Plunges 5.62% as Technical Breakdown Signals Extended Downtrend

Candlestick Theory
Li Auto’s recent price action reveals critical patterns. The stock closed at $24.36 (down 5.62%) on September 26, 2025, forming a long red candle that breached the key support near $25.00 (established during consolidation from August to September). This breakdown follows a bearish engulfing pattern after a brief rally to $27.10, signaling strong selling pressure. Resistance now converges around $26.50 (September 25 high), while the psychological $24.00 level acts as immediate support. A close below $24.31 (September 26 low) may accelerate declines.
Moving Average Theory
The 50-day MA ($25.90) crossed below the 100-day MA ($26.40) in late September, confirming a near-term bearish trend. Current price ($24.36) trades firmly below all three MAs—50-day, 100-day, and 200-day ($26.80)—indicating sustained downward momentum. The 200-day MA’s downward slope since July 2025 reinforces a structural downtrend. Confluence of resistance near $26.50 aligns with the 50-day/100-day MA cluster, suggesting robust overhead supply.
MACD & KDJ Indicators
MACD (12,26,9) remains in negative territory with the signal line above the histogram, reflecting persistent bearish momentum. KDJ shows mixed signals: the %K line (33) hovers near oversold territory but remains below the %D line (38), lacking a clear reversal trigger. Notably, the September 26 sell-off occurred without oversold KDJ readings, diverging from typical exhaustion patterns and implying further downside risk. MACD’s failure to breach the zero line during recent rallies underscores weak buying interest.
Bollinger Bands
A volatility expansion occurred on September 26 as price pierced the lower Bollinger Band ($25.20, 20-day SMA with 2 SD bands), coinciding with a 5.62% drop on elevated volume. This breakdown follows a prolonged band contraction in mid-September, resolving in bearish directionality. The band width expansion suggests accelerating selling pressure, with the lower band ($24.80) now acting as dynamic resistance. Sustained trading below the lower band may signal oversold conditions but carries risk of continued volatility.
Volume-Price Relationship
The September 26 decline was validated by a substantial volume spike (15.55 million shares vs. 30-day average ~5 million), confirming bearish conviction. Conversely, the September 15 rally (+6.90%) saw even higher volume (16.7 million), highlighting distribution at resistance. Recent downswings consistently exhibit higher volume than upswings, indicating dominant selling pressure. Volume divergence on minor rebounds (e.g., September 24-25) further questions sustainability of recoveries.
Relative Strength Index (RSI)
The 14-day RSI (35) approaches oversold territory but lacks historical extremes (RSI touched 28 in August 2025). Current readings do not yet signal a washout, particularly given the strong volume-backed breakdown. Previous oversold RSI bounces in May and August 2025 provided temporary relief but failed to reverse the primary downtrend. Caution is warranted as RSI may remain depressed during extended bearish phases, with a decisive break below 30 needed to signal potential capitulation.
Fibonacci Retracement
Using the March 2025 high ($33.12) and September 2025 low ($22.42) as anchor points, key Fibonacci levels define critical zones. The recent breakdown below the 38.2% retracement ($26.55) reinforced bearish control, with the 50% level ($24.95) now acting as resistance. Confluence exists at the 61.8% retracement ($23.35), aligning with the August 2025 swing low. A decisive break below $23.35 could expose the 78.6% level ($21.75), while recovery above $24.95 is needed to challenge the bearish structure.
Synthesis & Confluence
Multiple indicators converge to signal bearish dominance for Li Auto. The breakdown below $25.00 (candlestick support and Fibonacci 38.2%) occurred with MACD negativity, KDJ hesitation, and volume confirmation, compounding bearish weight. Divergence appears in KDJ’s failure to reach oversold extremes during the latest drop, potentially indicating unfinished downside. The decisive close below all key MAs—especially the psychologically critical 200-day MA—reinforces a structural downtrend. Near-term relief may emerge at Fibonacci 61.8% ($23.35) if oversold RSI readings coincide with volume contraction, though the path of least resistance favors further downside absent a recovery above $25.00.