Reddit Stock Jumps 6.84% As Technical Indicators Signal Bullish Momentum

Reddit (RDDT) concluded the most recent session at $225.54, posting a notable 6.84% gain on elevated volume. This analysis examines key technical dynamics following this upward movement.
Candlestick Theory
The August 28th session formed a robust bullish candle that engulfed the prior day’s losses, suggesting strong buyer conviction near the $208 support zone. Significant resistance emerges at $230–235, aligning with the August 22nd high of $230.25 and the August 19th peak of $238.84. The $205–208 range now establishes critical support, validated by the August 20th low of $205.37 and August 27th test of $208.24.
Moving Average Theory
The 50-day SMA ($178) and 100-day SMA ($156) maintain upward slopes above the ascending 200-day SMA ($128), confirming the long-term bullish structure. Despite recent volatility, the price remains above all key averages. The August 28th close above the 50-day SMA reinforces intermediate-term support. Golden Cross conditions (50 > 100 > 200) remain intact, though price consolidation near the 50-day SMA warrants monitoring.
MACD & KDJ Indicators
MACD exhibits a bullish crossover emerging from negative territory, signaling improving momentum after the oversold conditions seen in late August. The KDJ oscillator exited oversold (below 20) on August 26th; the %K line’s sharp ascent to 75 and %D to 55 reflects accelerating upside momentum. This alignment suggests strengthening recovery potential, though overbought KDJ thresholds (above 80) could invite short-term resistance.
Bollinger Bands
Volatility expanded sharply during the August correction, with the bandwidth widening 30% from mid-August lows. The August 28th close breached the midline (20-day SMA at $218), targeting the upper band at $237. A prior Bollinger squeeze in early August preceded the sharp downside move, highlighting the bands’ effectiveness in flagging volatility shifts. Current price position indicates room toward $235 before upper-band resistance.
Volume-Price Relationship
Distribution volume peaked at 13.1M shares on August 20th during the sell-off, confirming capitulation. The subsequent rebound saw volume expand on up days, culminating in the August 28th rally’s 5.13M shares (20% above 30-day average). This accumulation pattern validates buyer conviction. Sustained advances above average volume would strengthen bullish continuity signals.
Relative Strength Index (RSI)
The 14-day RSI recovered sharply from oversold (28 on August 20th) to neutral at 58 by August 28th, eliminating divergence concerns during the rebound. Neutral positioning allows further upside before overbought risks emerge. The swift RSI reversal aligns with momentum shifts captured by MACD/KDJ, reinforcing recovery credibility.
Fibonacci Retracement
Applying Fib levels to the decline from the August 18th high of $253.14 to the August 20th low of $205.37, the 38.2% retracement at $223.11 was surpassed during the August 28th rally. The 50% level at $229.25 and 61.8% at $235.40 now constitute immediate technical targets. Confluence exists near $229–230, where the 50% Fib aligns with the August 22nd swing high.
Confluence and Divergence
Multi-indicator confluence strengthens the bull case: Volume validates the candlestick reversal, MACD/KDJ crossovers signal momentum recovery, and RSI exited oversold without divergence. Bollinger Band breakout and golden cross MA alignment further support upside potential. A notable divergence occurred in mid-August when price made higher highs above $230 while RSI and MACD peaked lower, foreshadowing the correction. No such divergences currently exist.
The technical structure favors continued near-term upside toward the $229–235 resistance confluence. Traders should monitor volume sustainability at these levels, as well as KDJ overbought readings, to gauge breakout potential versus consolidation. The $205–208 support zone remains critical for trend preservation.