Reddit's RDDT surges 5.23% on bullish engulfing pattern and golden cross as key resistance looms at $241.89.

Candlestick Theory
Reddit (RDDT) has surged 5.23% in the most recent session, forming a bullish engulfing pattern amid a backdrop of higher highs and higher lows over the past two weeks. Key resistance levels emerge at $241.89 (recent close) and $236.93 (prior intraday high on 2025-12-30), while critical support is identified at $227.50 (2025-12-31 low).

The price action suggests a potential continuation of the uptrend, though a break below $227.50 could trigger a retest of the 2025-11-25 low at $196.57.
Moving Average Theory
Short-term momentum aligns with the 50-day moving average (~$220–$225 range), which currently supports the price action. The 100-day (~$215) and 200-day (~$200) averages lag behind, confirming a bullish bias. However, the 50-day MA crossing above the 200-day MA in recent weeks (golden cross) strengthens the case for a sustained uptrend. A pullback to the 50-day MA could act as a dynamic support level.
MACD & KDJ Indicators
The MACD histogram has expanded into positive territory, with the fast line above the signal line, reinforcing upward momentum. The stochastic oscillator (KDJ) shows K at ~85 and D at ~75, nearing overbought territory, which may indicate a short-term correction. Divergence is noted: while prices hit a 52-week high, the MACD’s upward slope has slowed, suggesting caution about overextended gains.
Bollinger Bands
Volatility has expanded recently, with the price nearing the upper Bollinger Band ($241.89 vs. 20-day mean ~$220). This contraction/expansion pattern suggests heightened buying pressure but also signals potential exhaustion. A break above the upper band may trigger further gains, while a retest of the lower band (~$200) could indicate a deeper retracement.
Volume-Price Relationship
Trading volume spiked to $841.76 million on the recent 5.23% rally, validating the move’s strength. However, volume has declined in the past three sessions despite price consolidation near resistance, hinting at waning conviction. Sustained volume above $500 million would likely support a breakout, whereas a volume contraction could precede a reversal.
Relative Strength Index (RSI)
The 14-day RSI stands at ~68, nearing overbought territory (threshold >70). While this suggests a potential pullback, historical data shows RSI frequently exceeded 70 during the 2025-08–2025-10 rally, indicating caution about interpreting overbought levels in strong trends. A close below 60 would signal weakening momentum.
Fibonacci Retracement
Applying Fibonacci levels to the 2025-08-01 low ($177.77) to the 2025-10-31 high ($230.97) reveals key levels: 38.2% at $214.50, 50% at $204.37, and 61.8% at $194.24. The current price (~$241.89) has surpassed the 23.6% retracement level, suggesting a possible retest of the 38.2% level as support before resuming the uptrend.
Confluence and Divergences
Confluence is observed between the bullish engulfing pattern, golden cross on moving averages, and strong volume on the recent rally, all pointing to a continuation. However, divergences in the stochastic oscillator and MACD momentum suggest caution about overbought conditions. A breakdown below $227.50 support, combined with declining volume, could trigger a retracement to the 50% Fibonacci level.

The probabilistic outlook favors a short-term continuation of the uptrend, with key resistance at $241.89 and support at $227.50. However, overbought indicators and waning volume suggest a potential consolidation phase, with Fibonacci levels providing strategic targets for further analysis.