Elbit Systems Shares Plunge 3.51% As Bearish Signals Converge At Key 435 Support

Candlestick Theory
Elbit Systems (ESLT) exhibits a bearish reversal pattern in recent sessions. The June 18 candle closed near its low (438) after a sharp 3.51% decline, forming a bearish engulfing pattern that negates the prior day’s 1.50% gain. Key resistance is evident at 456.5 (June 18 high), aligning with the June 16 peak of 476.04. Support emerges near 437.3 (June 18 low), backed by the March 24 trough of 395.5. A sustained break below 437.3 may signal further downside toward the 200-day moving average.
Moving Average Theory
The 50-day MA (approx. 418) currently acts as dynamic support, while the 100-day (approx. 395) and 200-day (approx. 370) MAs maintain upward slopes, confirming the long-term uptrend. However, the short-term 50-day MA is flattening after the June 18 sell-off. A death cross is absent, but the price trading below the 10-day MA suggests near-term bearish pressure. Confluence exists at 395–400, where the 100-day MA and March-April support converge.
MACD & KDJ Indicators
MACD shows a bearish crossover, with the histogram turning negative on June 18, indicating waning momentum. KDJ corroborates this, with the %K line (13) crossing below %D (28) in oversold territory. While both oscillators signal short-term bearishness, MACD’s divergence from the May highs suggests exhaustion. The KDJ’s oversold reading (J-line at 8) hints at a potential relief rally, though not yet confirmed.
Bollinger Bands
Volatility expanded sharply on June 16 (high of 476.04), pushing prices above the upper band—a classic overbought signal that preceded the 3.51% drop. The June 18 close near the lower band (438) indicates renewed selling pressure. Band contraction in early June (width narrowing to 15 points) resolved with downside expansion, supporting bearish momentum. A test of the lower band (now ~435) could trigger a minor bounce or breakdown.
Volume-Price Relationship
The June 16 sell-off occurred on the highest volume in three months (335,897 shares), validating bearish conviction. June 18’s decline also saw elevated volume (221,644 shares), exceeding the 30-day average. Conversely, the June 13 rally (371,127 shares) lacked follow-through, suggesting weak bullish commitment. Volume divergence on rebounds signals sustainability issues for recoveries.
Relative Strength Index (RSI)
The 14-day RSI (44) is neutral but trending down from overbought conditions (72 on June 13). While not oversold, its descent aligns with recent price weakness. Notable bearish divergence occurred as RSI peaked at 72 in mid-June while prices made higher highs, foreshadowing the correction. A break below 30 RSI would signal oversold conditions, but intermediate support near 40 may slow declines.
Fibonacci Retracement
Applying Fibonacci to the rally from the March 24 low (395.5) to the June 16 high (476.04) yields key levels. The 38.2% retracement (442) was breached on June 18, shifting focus to the 50% level (435.8). Confluence exists here with the June 12 low (422) and the 100-day MA. The 61.8% level (429.5) aligns with the May 29 support cluster (403–394). A hold above 435.8 is critical to avoid a deeper pullback.
Synthesis of Confluence and Divergence
Confluence of bearish signals appears at 435–442: the 50% Fibonacci level, Bollinger lower band, and volume-validated breakdown. Divergence emerges with KDJ’s oversold reading conflicting with MACD’s bearish crossover. While RSI and moving averages suggest intermediate support near 395–400, the candlestick structure and volume indicate near-term downside bias. A close above 456.5 resistance would invalidate the bearish structure, but probabilities favor testing 435.8 before stabilization.