Teva Pharmaceutical Surges 6.76% On Heavy Volume As Technicals Turn Bullish

Teva Pharmaceutical exhibited notable strength in the latest session, advancing 6.76% to close at $18.80 after testing intraday highs near $18.83. This marks the second consecutive day of gains, bringing the two-day rally to 7.06% on substantially elevated volume of 20.1 million shares traded.
Candlestick Theory
Recent price action shows a bullish reversal pattern emerging near the $17.33-$17.55 support zone. The current back-to-back white candles with higher highs/lows suggest building upside momentum, though the $18.83 level now acts as immediate resistance. Key historical reference points include the $16.00 psychological support (tested multiple times in May-July) and the $19.75 major resistance from January's swing high.
Moving Average Theory
The 50-day moving average (approximately $17.25) is currently being tested from below after the recent breakout. More significantly, price is approaching the 100-day and 200-day averages near $18.10-$18.30, which aligns with the July resistance zone. A decisive close above this confluence area would signal a potential trend reversal, while failure here may confirm these MAs as dynamic resistance. The shorter MA's incipient bullish crossover of the longer-term averages warrants monitoring.
MACD & KDJ Indicators
MACD shows a developing bullish crossover in negative territory, with histogram bars accelerating upward - suggesting strengthening upside momentum. KDJ curves (particularly the %K line) are rising steeply from oversold territory below 20, though currently near 55 without yet reaching overbought conditions. This configuration indicates room for continued upside before technical exhaustion. No bearish divergences are present across these oscillators.
Bollinger Bands
The bands are expanding following a prolonged contraction period in July-August when price consolidated between $16.00-$17.50. The breakout above the 20-day moving average (mid-Band) and subsequent touch of the upper Band at $18.83 signals renewed volatility expansion to the upside. This suggests continuation potential, though the upper band currently caps immediate gains.
Volume-Price Relationship
The rally's sustainability is validated by volume patterns: Tuesday's 6.76% surge occurred on 20.1 million shares - more than double the 30-day average volume. This follows above-average volume during the August 13th reversal from $16.26 and the July 31st sell-off. Such volume confirmation at key turning points strengthens the technical significance of these price levels.
Relative Strength Index (RSI)
The 14-day RSI reading of 63 remains below overbought territory (70), though it's risen sharply from oversold conditions near 30 in early August. While not yet signaling exhaustion, its proximity to the 65-70 threshold warrants caution for potential near-term consolidation. Importantly, the RSI's higher low in August against price's lower low established a positive divergence that foreshadowed the current rally.
Fibonacci Retracement
Applying Fib levels to the January-July decline ($19.75 to $16.00) reveals critical thresholds: the 38.2% retracement at $17.42 was recently surpassed, shifting focus to the 50% level at $17.88 (now serving as support) and the 61.8% retracement at $18.33. This $18.30-$18.35 zone converges precisely with the 100/200-day moving averages and July resistance, creating a high-probability technical battleground.
Confluence exists at the $18.30-$18.35 resistance zone, where Bollinger Band resistance, key moving averages, and the 61.8% Fibonacci retracement converge - suggesting this barrier will likely determine the near-term trend. Bullish alignment is evident across volume confirmation, momentum oscillators, and candlestick patterns, though overcoming the $18.83-$19.75 resistance area remains essential for confirming a major trend reversal. The absence of bearish divergences reinforces the constructive technical backdrop, provided support near $17.80-$17.90 holds.