Reddit Jumps 7.54% On Heavy Volume As Technicals Signal Bullish Continuation

Reddit (RDDT) surged 7.54% in the latest trading session, marking its second consecutive day of gains with a cumulative 10.87% advance over this period, closing at $160.59 on substantial volume of 18.56 million shares. This price action forms part of a broader technical context that warrants multi-indicator analysis.
Candlestick Theory
The recent rally formed a robust bullish candle following a hammer pattern near $144.85 on July 29, suggesting reversal confirmation after testing the critical support zone between $138-$142. This area aligns with the June-July swing lows and now functions as major support. Resistance emerges near $163-$168, corresponding to the early July peaks where sellers previously dominated. The absence of upper shadows in the last two sessions indicates sustained buying pressure.
Moving Average Theory
The 50-day MA ($142) recently crossed above the 100-day MA ($135), reinforcing a bullish medium-term structure, while the 200-day MA ($121) maintains a positive slope. Current price sits above all three averages, confirming an uptrend. However, the sharp deviation from the 50-day MA (12% above) may invite near-term consolidation. The golden cross formation between the 50/200-day MAs six weeks ago established foundational bullish momentum.
MACD & KDJ Indicators
MACD histogram shows accelerating bullish momentum, with the signal line crossing into positive territory three sessions ago. Meanwhile, KDJ readings (K:85, D:78, J:99) reflect overbought conditions, with the J-line nearing extreme levels. While MACD supports continued upside, KDJ’s proximity to overbought territory warrants caution for potential near-term exhaustion. Divergence exists as MACD confirms the price breakout while KDJ flags stretched valuations.
Bollinger Bands
The bands expanded notably during the 7.54% surge, signaling volatility breakout. Price now trades near the upper band ($163), which typically acts as gravitational resistance during overextended moves. This expansion follows a two-week period of band contraction, reflecting the compression of volatility before the directional move. Sustained trading above the 20-day midline ($152) would validate bullish control.
Volume-Price Relationship
The rally’s credibility is bolstered by progressively rising volume, with the latest session’s 18.56 million shares exceeding the 10-day average by 40%. This surge occurred alongside a 10.87% two-day advance, confirming accumulation. However, volume remains below the $256M benchmark set during the May earnings gap-up, suggesting the move may need higher participation to sustain momentum.
Relative Strength Index (RSI)
The 14-day RSI now reads 78, surpassing the overbought threshold of 70. Historically, similar readings in April and July preceded 5-10% pullbacks within two weeks. While this warns of near-term exhaustion, its reliability is tempered by the stock’s tendency to maintain overbought conditions during strong uptrends—particularly evident during the June-July rally where RSI remained above 70 for seven sessions.
Fibonacci Retracement
Applying Fibonacci to the March-April decline (high: $189.66, low: $86.91) shows significant confluence. The 61.8% retracement level ($149) now acts as support, recently validated by the July 29 low of $144.85. The current advance tests the 78.6% retracement at $162.30—nearly identical to today’s high of $162.88—creating immediate resistance. A decisive break above this level would target the 100% extension at $189.66.
Multi-indicator confluence occurs at the $162-$163 resistance zone, where Bollinger Band resistance, Fibonacci levels, and overbought oscillators converge, suggesting heightened reversal probability near-term. However, bullish volume confirmation, MACD momentum, and moving average alignment support a broader upside bias. Critical divergence appears between RSI/KDJ warnings and volume/MACD confirmations, indicating that while tactical pullbacks are likely, structural integrity remains intact above $149 support. Probabilistically, consolidation appears imminent before testing the $169-$175 Q1 highs, contingent on holding the 50-day MA.