United Airlines Stock Drops 4.34% After 14.33% Rally As Technicals Signal Exhaustion

United Airlines Holdings (UAL) fell 4.34% to $87.69 in the latest session, erasing a substantial portion of the prior day's 14.33% surge. This price action occurred alongside elevated volume of 9.83 million shares, suggesting intensified selling pressure. The technical landscape is assessed through multiple frameworks below.
Candlestick Theory
Recent sessions exhibit high-volatility patterns characteristic of trend exhaustion. The July 10th long white candle (+14.33%) followed by a sizable bearish engulfing candle (-4.34% on July 11th) signals potential short-term reversal near the $93.72 resistance. Key support emerges at $84.89 (July 10th low), with resistance firmly established at the psychological $90 level, reinforced by the July 11th high rejection.
Moving Average Theory
The 50-day MA ($76.80) maintains an upward slope above the flattening 100-day MA ($73.40) and rising 200-day MA ($70.60), preserving the intermediate-term bullish structure. However, the July 11th close at $87.69 represents a decisive break below the 20-day EMA ($85.40), indicating near-term trend weakness. Confluence exists at $84-85 where the 50-day MA converges with horizontal support.
MACD & KDJ Indicators
MACD lines exhibit a bearish crossover below the zero line, with histogram bars expanding negatively—confirming accelerating downward momentum. Simultaneously, the KDJ oscillator retreated sharply from overbought territory (K:86, D:83 on July 10th) to neutral readings (K:65, D:71) as price rejected the $93 area. This alignment indicates waning upside strength and potential continuation of corrective pressure toward oversold levels.
Bollinger Bands
July’s 15% price surge breached the upper Bollinger Band ($88.50) before snapping back inside the bands—a classic exhaustion signal. Bandwidth expanded dramatically during this move, indicating heightened volatility. Current price sits at the middle band ($84.30), with the lower band ($79.50) representing immediate downside potential should bearish momentum persist.
Volume-Price Relationship
Volume surged 375% during the July 10th rally but only increased 15% during the subsequent sell-off, suggesting distribution near the $93.72 peak. This divergence implies weaker conviction in the upside breakout. The absence of corresponding volume on rebounds since late June further questions sustainability of recovery attempts. High-volume breakdowns near $74 and $80 in Q2 remain technically significant as support markers.
Relative Strength Index (RSI)
The 14-day RSI (current: 51) retreated from a tenuous overbought reading (72 on July 10th), negating the immediate upside momentum. While not yet oversold, this swift rejection near the 70 threshold warns of exhausted bullish energy. The failure to sustain RSI readings above 55 during July rebounds reinforces the deterioration in underlying strength.
Fibonacci Retracement
The primary retracement grid from the January high ($116) to April low ($56.15) shows critical confluences. The 38.2% level ($93.14) precisely capped the July 10th rally at $93.72, validating its technical significance. Current price hovers near the 50% retracement ($86.08), which aligns with the July 11th low ($87.16). A sustained break below $86 would target the 61.8% Fibonacci support at $79.03—a level strengthened by the May consolidation zone.
Confluence & Divergence Synthesis
Notable confluence exists at the $93 zone, where the 38.2% Fibonacci level, July high, and Bollinger Band resistance converged to trigger reversal. Divergence emerged in RSI’s failure to confirm the July high while MACD’s bearish crossover accelerated. The breach of 20-day EMA amid expanding volume affirms near-term bearish bias, though the golden cross (50>100>200 MA) provides structural support. Probable consolidation is anticipated between the $85 support (50-day MA/50% Fibonacci) and $90 resistance, with directional bias dependent on volume confirmation below $85 or above $90.