Reddit Rises 3.40% To $240 On Technical Strength And Volume Surge

Reddit (RDDT) demonstrated notable strength in the most recent session, rising 3.40% to close at $240, marking its third consecutive daily gain for a cumulative 9.06% advance. This rally occurred within a broader technical context warranting multi-indicator analysis.
Candlestick Theory
Recent sessions formed a bullish pattern sequence, with the September 3rd hammer candlestick (low: $218.70, close: $223.14) establishing interim support near $220. The subsequent three white soldiers pattern from September 4th-5th confirmed bullish momentum, overcoming the August 28th swing high resistance at $227. The $240 psychological level now serves as immediate resistance, while the August 20th reaction low at $205.37 provides major support. Volume expansion during the advance strengthens pattern validity.
Moving Average Theory
The 50-day MA ($195), 100-day MA ($165), and 200-day MA ($135) exhibit bullish sequencing with shorter averages above longer-term ones. Recent consolidation above the 50-day MA demonstrates robust support, while the golden cross formation (50-day above 200-day in May 2025) continues to validate the primary uptrend. The widening gap between the 50-day and 200-day MAs (+30%) signals accelerating intermediate-term momentum.
MACD & KDJ Indicators
MACD maintains a bullish crossover above its signal line, with histogram bars expanding since September 3rd. KDJ readings (K: 78, D: 71, J: 92) suggest overbought territory but without immediate reversal signals as J- line upward momentum persists. Notable positive divergence occurred in late August when price established higher lows while KDJ formed a shallower trough. This confluence suggests near-term continuation potential despite overbought readings.
Bollinger Bands
Bands expanded sharply during the August volatility surge (width: $45 on Aug 20) and have since contracted by 30%, indicating declining volatility. Current price trades near the upper band ($243), typically signaling stretched conditions, though band expansion remains modest compared to August extremes. The July-September base formation between $140-$160 established a volatility anchor, with current moves testing the upper range of established volatility norms.
Volume-Price Relationship
The advance from August 20th to September 5th featured two high-conviction volume signatures: August 28th's 6.84% rally on 5.15M shares (20% above average) and September 3rd's 1.40% gain on 8.43M shares (double average). This distribution indicates institutional accumulation. Conversely, the August 20th decline (-4.30% on 13.07M shares) represented capitulation, establishing a volume climax bottom. Current volume patterns support continuation.
Relative Strength Index (RSI)
The 14-day RSI (66) approaches overbought territory but lacks bearish divergence. Notably, during August's pullback to $205, RSI held above 40, maintaining a bull trend structure. The oversold reading of 29 on August 20th preceded a significant reversal, while the current positioning suggests room for further advancement before reaching concerning overbought levels. Caution is warranted if RSI sustains above 75 without price confirmation.
Fibonacci Retracement
Applying Fibonacci to the April 2025 trough ($79.68) and February 2025 peak ($230.41): The $155 level (38.2% retracement) contained July-August pullbacks, while the $130 level (61.8%) underpinned May's consolidation. Current trading exceeds the 78.6% retracement at $213, suggesting potential retest of the $230 all-time high. The $205-$210 zone (July highs) now functions as a Fibonacci-based support confluence.
Confluence & Divergence
Significant bullish confluence emerged in late August when: 1) Price bounced from the 38.2% Fibonacci level ($155), 2) RSI registered oversold at 29, 3) MACD formed positive divergence. The only minor divergence exists currently, with KDJ overbought while RSI remains neutral. Volume confirmation of recent highs provides additional conviction. Despite short-term overbought KDJ indications, multi-indicator alignment favors near-term upside bias toward the $250 psychological barrier, provided support at $220 holds.