Reddit Stock Surges 17.47% To $188.64 On Bullish Technical Signals

Technical Analysis of Reddit (RDDT) Stock
Candlestick Theory
Reddit's recent candlestick pattern exhibits strong bullish momentum, culminating in a 17.47% surge on August 1, 2025, marking the third consecutive white candle. This sequence suggests sustained buying pressure, with the August 1 session showing a long bullish body (open: $177.77, close: $188.64) and minimal upper wick, indicating minimal profit-taking near the day’s high of $196.68. Key resistance emerges at the $196.68–$200 psychological barrier, while support sits at the July 31 low of $154.83. The three-day rally’s magnitude warrants monitoring for exhaustion signals like bearish engulfing or doji patterns near resistance.
Moving Average Theory
The 50-day SMA ($149.50) recently crossed above the 100-day ($141.20) and 200-day SMA ($129.80), forming a bullish golden cross. Current price ($188.64) trades comfortably above all three SMAs, confirming a strong intermediate-to-long-term uptrend. The expanding distance between the 50-day and 200-day SMA underscores accelerating momentum. However, the sharp rally has pushed the price 26% above the 50-day SMA, hinting at potential near-term consolidation as the price may revert toward the mean.
MACD & KDJ Indicators
The MACD (12,26,9) shows a widening positive histogram, with both the MACD line and signal line in bullish territory above zero. This alignment reinforces strong upward momentum. Concurrently, the KDJ oscillator reflects overbought conditions, with the K-line (89) and D-line (85) above 80 after the rally. While this signals strength, it also flags short-term exhaustion risk. Minor bearish divergence appears as price made higher highs on August 1, but the KDJ’s peaks flattened, suggesting weakening momentum that may precede a pullback.
Bollinger Bands
Volatility expanded sharply during the 30% three-day surge, with the bands widening to accommodate the breakout. Price closed near the upper band ($191.20), confirming overbought territory. Historically, such band penetrations triggered mean-reversion pullbacks toward the 20-day SMA ($170.50). The current setup suggests resistance at $196–$200 and support at the middle band ($170.50). A contraction in band width from current levels could signal consolidation before the next directional move.
Volume-Price Relationship
The rally’s sustainability is validated by ascending volume, with August 1 volume (27.2M shares) nearly doubling the 30-day average. This climactic volume confirms institutional participation in the breakout. However, the highest volume day occurred at the February 13 peak ($214.30), which later reversed. Current volume, while robust, remains below that pivotal level, warranting caution if volume diminishes near resistance.
Relative Strength Index (RSI)
The 14-day RSI (78) entered overbought territory, above the 70 threshold. While this reflects strong momentum, historical data shows RDDT can sustain overbought readings during powerful uptrends (e.g., February 2025 rally peaked at RSI 86). Nevertheless, current levels suggest limited near-term upside without consolidation. Traders should watch for bearish divergence or a break below 70 to signal cooling momentum.
Fibonacci Retracement
Using the major downtrend from the February 10 high of $230.41 to the April 8 low of $88.89, key retracement levels cluster around technical confluences. The 50% retracement ($159.65) acted as support during July consolidations, while the 61.8% level ($177.30) was breached decisively in the latest rally. Current price approaches the 68.1% extension ($192.50), aligning with August 1’s high of $196.68. A close above $192.50 could target the 78.6% level ($210.80).
Confluence & Divergence
Multiple indicators agree on overbought conditions near the $196–$200 resistance zone, including RSI, Bollinger Bands, KDJ, and Fibonacci. Bullish confluence appears in volume-supported price action and moving average alignment. Key divergence lies between MACD’s continued strength and KDJ’s momentum fade. Probabilistically, the weight of evidence suggests near-term consolidation between $170 (50-day SMA/Bollinger mid-band) and $196 (Fibonacci/psychological resistance) before further directional resolution.