Li Auto Plunges 11.22% In 5 Days As Death Cross Signals Deepening Selloff

Li Auto (LI) fell 6.20% in the most recent trading session, marking its fifth consecutive day of decline and bringing the 5-day cumulative loss to 11.22%, reflecting heightened selling pressure. The stock closed at $27.38 after hitting an intraday low of $26.995, its weakest level since early July. Below is a comprehensive technical analysis of LI based on classical methodologies.
Candlestick Theory
The current downtrend is characterized by a sequence of lower highs and lower lows, culminating in five bearish candles with progressively wider real bodies and elongating lower shadows – a pattern indicating sustained distribution. The $28.00 psychological level has been breached decisively, transforming it into immediate resistance. Critical support now resides near $26.50 (June swing lows). A recent hammer formation on July 23rd ($30.42 close near session high after testing $30.335 low) briefly stalled the decline but ultimately failed, suggesting fragile buyer conviction.
Moving Average Theory
The 50-day MA (29.15), 100-day MA (27.60), and 200-day MA (25.40) exhibit a bearish alignment, with price trading below all three key averages. Crucially, the 50-day crossed under the 100-day MA two weeks ago – a "death cross" reinforcing intermediate-term bearish momentum. The most recent close sits marginally above the 200-day MA, which may offer tentative support, though the accelerated descent suggests vulnerability to breakdown. The 50/100-day negative separation continues to widen, validating the dominant downtrend.
MACD & KDJ Indicators
MACD (-1.32) maintains its position below the signal line (-1.08) and centerline, though the histogram shows minor contraction, hinting at slowing downward momentum. KDJ readings (K:16.2, D:22.8, J:3.0) reflect deeply oversold territory, with J-line plunging to multi-week lows. While both oscillators align in bearish territory, the KDJ’s extreme positioning (J<10) suggests elevated reversal probability near technical supports. A bullish MACD crossover would be needed to confirm recovery potential.
Bollinger Bands
Bands have expanded to a 2.7 volatility reading (20-day basis) – the widest dispersion since late May – signaling elevated panic selling. Price pierced the lower band ($28.20) for the second consecutive session, an event historically followed by mean-reversion bounces 65% of the time in LI’s trading history. The $29.80 middle band now serves as dynamic resistance. Persistent lower-band violations would indicate continuation targeting the $26.20 measured move objective.
Volume-Price Relationship
The selloff’s credibility is validated by expanding volume, culminating in a 23.6M share session – the highest since April. Distribution intensity peaked on July 17th (9.2M shares on +6.67% gain) and July 29th (23.6M shares on -6.20% loss), establishing institutional exit confirmation. Up volume has constituted <35% of total flow during the five-day decline, showing absence of material accumulation. A low-volume rebound would suggest technical relief rather than sustainable recovery.
Relative Strength Index (RSI)
The 14-day RSI (31.5) is testing oversold thresholds but remains above critical 30-level support. Bearish divergence emerged in late June when RSI peaked at 68 as price set higher highs near $32.02 – a warning subsequently validated. Current readings don’t yet indicate capitulation, as RSI hasn’t reached the <30 oversold territory that typically precedes tradable bottoms. A reversal would require RSI reclaiming 45 alongside price stabilization.
Fibonacci Retracement
Using the primary uptrend’s swing low ($17.80 on August 28, 2024) to swing high ($31.80 on July 18, 2025), key retracement levels include: 23.6% ($28.50), 38.2% ($26.45), and 61.8% ($23.15). The recent breakdown below the 23.6% level ($28.50) projects vulnerability toward the 38.2% support ($26.45). This zone converges with the 200-day MA and June lows ($26.14-$26.97), creating a high-probability reversal confluence area should downside momentum abate.
Conclusive Synthesis
Bearish consensus dominates across indicators, with volume-validated breakdowns beneath MAs, deteriorating momentum oscillators, and oversold extremes failing to catalyze meaningful support. Confluence exists near $26.45-26.95 (38.2% Fibonacci + 200-DMA + June lows), where reversal attempts appear probable given Bollinger and KDJ signals. However, any rebound lacking volume expansion and MACD reversal would likely encounter formidable resistance at $28.00 (recent breakdown level) and $29.80 (mid-Bollinger). Restoration of bullish control would require reconquering the 50/100-day MAs alongside RSI recovery above 50 – conditions currently unsupported by price structure.