Royalty Pharma Drops 3.70% as Bearish Technicals Reinforce Resistance at $38

Royalty Pharma (RPRX) concluded its most recent session at $36.19, a decline of 3.70%, extending its short-term bearish momentum. This analysis evaluates the technical landscape using multiple frameworks, with probabilistic interpretations of potential price developments.
Candlestick Theory
The August 11th session formed a long red candle closing near its low, confirming rejection at the $38 resistance level established on May 19th and reinforced by the August 5th high. This follows a bearish engulfing pattern on August 6th (high $37.77, close $37.12), which signaled exhaustion after the August 4th rally. Key support resides at $35.60, the July 16th swing low, with secondary support at $34.05 (June 11th low). The $37.90-$38.00 zone now serves as robust resistance.
Moving Average Theory
The 50-day SMA ($35.80) crossed below the 100-day SMA ($35.95) in late July, confirming a bearish medium-term bias. Price currently trades below all three key moving averages (50/100/200-day), with the 200-day SMA ($33.40) providing the only positive slope. The persistent trading below the 50-day SMA since early July indicates sustained selling pressure, though a convergence near $35.85 may offer temporary consolidation support.
MACD & KDJ Indicators
The MACD histogram remains in negative territory (-0.42), though its slope has moderated, suggesting weakening downward momentum. The signal line crossover on July 29th triggered the current bearish phase. Concurrently, the KDJ shows K-line (28) and D-line (32) in oversold territory with a bullish divergence emerging: price made lower lows on August 11th versus August 7th, while K-line formed higher lows. This divergence may foreshadow near-term stabilization, though bearish confirmation requires K-line to break above 50.
Bollinger Bands
Bands contracted sharply in early August (width: $1.20 on August 5th), preceding the recent breakdown below the 20-day SMA. Price currently hugs the lower band ($36.10), indicating oversold conditions and heightened reversal probability. Band expansion resumed on August 11th, suggesting volatility continuation, though closes below the lower band are typically unsustainable beyond 2-3 sessions.
Volume-Price Relationship
Down days have shown elevated volume, particularly the August 11th decline on 3.53 million shares (20% above 30-day average), confirming bearish conviction. Conversely, the August 4th rally occurred on below-average volume (2.94M vs. 3.5M average), questioning its sustainability. The volume profile highlights $35.50-$36.00 as a high-volume node, increasing the likelihood of support-based consolidation.
Relative Strength Index (RSI)
The 14-day RSI (41.6) remains neutral but has diverged positively from price, forming a higher low versus August 7th as price declined further. While not yet oversold, this divergence aligns with KDJ's signal. Traders should note that RSI values between 30-50 during downtrends can persist longer than typical oversold readings, requiring confirmation from other indicators for reversal signals.
Fibonacci Retracement
Using the March 26th low ($31.56) to June 24th high ($36.32) as the baseline swing:
- 61.8% retracement sits at $33.46 (near 200-day SMA)
- 50% level at $33.94
- 38.2% at $34.42
Current price is testing the 23.6% retracement ($35.60), which aligns with the July 16th swing low. Confluence exists at $35.60-$35.80 between Fibonacci support, the 50/100-day SMA cluster, and the volume node, making this a critical defensive zone for bulls.
Confluence and Divergence Observations
Significant confluence appears at $35.60-$35.80, combining Fibonacci, moving average, volume, and historical price supports. Bearish consensus dominates with MA alignment, volume confirmation, and breakdown below Bollinger midline. Crucially, positive divergences in both KDJ and RSI against price suggest waning downside momentum. Should $35.60 hold, these divergences may catalyze a rebound toward $37.00 resistance. However, failure at this support would expose the $34.42 Fibonacci level, potentially accelerating selling pressure. Traders should monitor volume patterns for reversal confirmation, particularly any bullish candle formations near the $35.60 confluence zone.