Elevance Health (ELV) Surges 4.79% in Four-Day Rally as Technical Indicators Signal Overbought Conditions

Elevance Health (ELV) has experienced a 4.79% gain in its most recent session, marking a four-day winning streak with a cumulative price increase of 6.46%. The stock’s recent price action and historical volatility suggest a dynamic interplay between bullish momentum and potential overbought conditions. Below is a structured technical analysis integrating multiple methodologies to assess its near-term trajectory.

Candlestick Theory

The recent price action exhibits a series of higher highs and higher lows, with the 2025-08-15 close at $309.57 forming a bullish engulfing pattern relative to the prior session’s bearish candle. Key support levels are evident at $295.43 (2025-08-14 close) and $283.48 (2025-08-07 close), while resistance emerges at $344.55 (2025-07-16 high) and $395.76 (2025-06-01 high). A breakdown below $295.43 could trigger a test of the $283.48 level, whereas a breakout above $344.55 might signal a resumption of the 2024-09–2025-01 upward trend.

Moving Average Theory

The 50-day moving average (approximately $320–$325, calculated from the 2025-08 data) is currently above the 200-day MA (~$350–$360), indicating a short-term bullish bias. However, the 200-day MA remains above the 50-day MA, suggesting the long-term trend is still bearish. The 100-day MA (~$335–$340) is intermediate, with price currently below both the 50- and 100-day lines. This suggests a potential consolidation phase ahead of a directional breakout.

MACD & KDJ Indicators

The MACD histogram has shown positive divergence over the past five sessions, with the MACD line crossing above the signal line on 2025-08-13, signaling short-term bullish momentum. The KDJ oscillator (stochastic) indicates overbought conditions, with %K and %D converging near 80–85, suggesting a possible near-term pullback. However, the MACD’s upward trajectory and KDJ’s delayed overbought signal may indicate a continuation of the uptrend rather than an immediate reversal.

Bollinger Bands

Volatility has expanded in recent sessions, with price trading near the upper band (~$310–$315) on 2025-08-15. The 20-period Bollinger Bands width has widened from ~$25 to ~$30, reflecting heightened volatility. If the price closes above the upper band, it could validate a breakout; a sustained close below the middle band (~$300–$305) would signal renewed bearish pressure.

Volume-Price Relationship

Trading volume has spiked in recent sessions, with the 2025-08-15 volume (3.416M shares) exceeding the 20-day average by ~30%. This aligns with the price surge, validating the strength of the recent rally. However, the volume surge may also indicate exhaustion if the trend continues without further expansion, suggesting caution for short-term buyers.

Relative Strength Index (RSI)

The 14-day RSI has reached ~68–70, entering overbought territory. Historical data from the backtest highlights a cautionary note: while RSI overbought levels have shown mixed short-term performance (15.38% win rate in 3-day and 10-day horizons), medium-term (30-day) returns improved to 30.77%. This suggests that while immediate corrections are likely, the overbought condition may not necessarily signal a bearish reversal but rather a consolidation phase.

Fibonacci Retracement

Drawing Fibonacci levels between the 2025-07-16 high ($344.55) and 2025-08-04 low ($274.93), key retracement levels at 38.2% ($312.50) and 50% ($299.74) are critical. The current price near $309.57 suggests a potential test of the 38.2% level before a possible retest of the 50% level. A breakdown below 50% would invalidate the bullish case.

Backtest Hypothesis

The backtest analysis of RSI overbought conditions from 2022 to 2025 reveals a nuanced pattern. While the 3-day and 10-day win rates are low (15.38% each), the 30-day win rate doubles to 30.77%. This implies that overbought RSI conditions may act as a contrarian signal in the short term but align with a continuation of the trend in the medium term. For ELV, the current overbought RSI (~70) could suggest a 3–5% pullback in the next 3–5 sessions, followed by a potential resumption of the uptrend if volume remains robust and the 200-day MA does not cross below the 50-day MA.