Reddit Stock Rebounds 3.13% After 11.91% Plunge As Key Support Holds At $200

Candlestick Theory
Reddit's most recent session formed a bullish closing candle (+3.13%), recovering from the prior day's low of $198.80. This follows a pronounced bearish engulfing pattern on October 1st (-11.91%), suggesting a potential short-term reversal. Key support crystallizes at $200 (psychological level and recent swing low), while resistance clusters near $213.38 (today’s high) and the $229–$241 zone from late September. A break above $213.38 may signal continued upside, while failure to hold $200 could reactivate selling pressure.
Moving Average Theory
Reddit’s 50-day moving average (MA) trends downward and currently intersects near $225, reflecting intermediate bearish momentum. The 100-day MA (∼$215) and 200-day MA (∼$180) retain upward slopes, implying long-term structural support. Price currently trades below the 50-day MA but above the 100/200-day MAs, confirming a conflicted medium-term trend. A "death cross" (50-day below 100-day) remains active, warranting caution unless reclaimed above $225.
MACD & KDJ Indicators
MACD exhibits a bearish crossover below its signal line but shows diminishing negative momentum as the histogram contracts. KDJ’s %K (40) and %D (35) are rising from oversold territory (<30), hinting at potential upside momentum. However, both oscillators remain below neutral levels, indicating unresolved bearish pressure. Confluence emerges as MACD’s easing downside aligns with KDJ’s nascent rebound, supporting a near-term stabilization scenario.
Bollinger Bands
Bollinger Bands (20-day) contracted sharply during September’s sell-off, signaling reduced volatility. Recent price action rebounded from the lower band ($198.80) toward the middle band ($210), suggesting mean reversion. The upper band ($235) now caps overhead resistance. A sustained move above the middle band could foreshadow a volatility expansion toward $220–$225.
Volume-Price Relationship
Volume surged to 15.8M shares during the October 1st sell-off, confirming bearish conviction. Recent sessions show declining volume on rallies (e.g., 8.4M shares on today’s +3.13% gain), raising sustainability concerns. This divergence suggests weak buying participation in the rebound. A decisive breakout above $215 with volume exceeding 10M shares would validate bullish reversals.
Relative Strength Index (RSI)
The 14-day RSI rebounded from oversold levels (28 on October 2nd) to its current neutral stance (∼45). This recovery aligns with price stabilization but remains short of overbought territory (>70). While the RSI exit from oversold conditions supports short-term upside, its sub-50 reading implies residual bearish inertia. A surge above 55 would strengthen recovery prospects.
Fibonacci Retracement
Applying Fibonacci to the August 20th low ($205.37) and the September 18th peak ($282.95): the pullback to $198.80 tested the 61.8% retracement ($201). A hold above this level reinforces support. Subsequent resistance levels are 50% ($224), 38.2% ($246), and the 23.6% ($264). Confluence exists at $200 (psychological/Fibonacci support), amplifying its technical relevance.
Confluence and Divergence
Confluence is observed at $200 (support), where Fibonacci, psychological levels, and the 100-day MA coalesce, bolstering its significance. Bearish divergences include weak volume on up-days and unresolved MACD negativity despite recent gains. Bullish convergence appears in KDJ’s oversold rebound and RSI’s recovery, suggesting near-term stabilization. However, the absence of a confirmed trend reversal indicator across multiple tools implies continued vulnerability below the 50-day MA ($225). A break above $213.38 with volume confirmation could shift momentum, targeting the 50% Fibonacci retracement at $224.