Reddit's 6.28% and 7.21% Gains Signal Bullish Trend Amid Golden Cross and MACD Crossovers

Candlestick Theory

Reddit’s recent price action reflects a bullish continuation pattern, with two consecutive up sessions (6.28% and 7.21% gains) forming a strong green candlestick body. Key support levels emerge around $180 (November 21 close) and $178 (November 20 low), while resistance aligns with the $190-200 range, previously tested in late October and early November 2025. The absence of long wicks in recent candles suggests limited bearish pressure, reinforcing the likelihood of a breakout above $195.

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Moving Average Theory

The 50-day moving average (currently ~$190-195) sits above the 200-day MA (~$180-185), forming a “golden cross” that signals a short-term bullish trend. The 100-day MA (~$185-190) acts as a dynamic support zone. Convergence between the 50-day and 100-day MAs near $190 suggests a potential consolidation period before a breakout. However, the 200-day MA remains a critical long-term reference, with a break below $180 potentially invalidating the bullish case.

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MACD & KDJ Indicators

The MACD histogram has turned positive, with the line crossing above the signal line (golden cross), confirming upward momentum. The KDJ (stochastic oscillator) shows the RSI approaching overbought territory (~65-70), though not yet exceeding 70. This suggests caution, as a divergence between the MACD and RSI could hint at a near-term pullback. The KDJ’s %K line (~68) remains above %D (~60), indicating sustained buying interest, but a cross below %D would signal weakening momentum.

Bollinger Bands

The current price (~$195) sits near the upper Bollinger Band, reflecting heightened volatility. The bands have widened significantly since late October, aligning with the recent volatility spike. A retest of the lower band (~$180-185) could occur if the upper band’s resistance fails, but the price’s proximity to the upper band suggests a continuation of the upward trend.

Volume-Price Relationship

Trading volume has surged in recent sessions, particularly on the November 24 close (~5.27 million shares), validating the price increase. However, volume on the November 21 session (~4.01 million) was lower despite a 0.88% gain, hinting at potential exhaustion. Sustained volume above 4.5 million shares per session would support the bullish case, while a drop below 3.5 million could indicate waning demand.

Relative Strength Index (RSI)

The 14-period RSI (~68) is approaching overbought territory, suggesting a possible correction. While overbought conditions do not guarantee a reversal, a close below 60 would indicate weakening momentum. A bearish divergence (price highs above $195 vs. RSI highs below 70) could amplify sell signals, though the current alignment of moving averages and MACD suggests the bullish trend remains intact.

Fibonacci Retracement

Key Fibonacci levels between the October 2025 high ($214) and November 2024 low ($160) identify critical support/resistance zones. The 61.8% retracement level (~$185) coincides with the 100-day MA and recent lows, making it a probable consolidation area. A break below the 50% retracement level (~$187) would target the 38.2% level (~$180), while a breakout above $200 could extend to the 78.6% level (~$207).

Backtest Hypothesis

The MACD-based strategy (buying on golden crosses and exiting on death crosses) historically generated a 11.4% CAGR from 2022-2025, albeit with higher volatility (24.6% max drawdown vs. SPY’s 22.8%). Current conditions align with the strategy’s entry criteria, as the 50-day MA and MACD golden cross are active. However, the RSI’s proximity to overbought levels and recent volume fluctuations suggest caution. A modified approach—holding until the 100-day MA crosses below the 200-day MA (death cross) or RSI breaches 70—could balance growth potential with risk management.

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