Reddit Stock Surges 4.65% As Bullish Technical Patterns Signal Upside Momentum

Candlestick Theory
Reddit's recent price action reveals a bullish engulfing pattern on October 9, 2025, as the stock surged 4.65% to close near its session high of $212.34 after testing support at $199.38. This follows a hammer candlestick on October 7 (low: $202.51, close: $205.92), signaling rejection of lower prices. Key resistance resides near $240–$246 (September peaks), while the $195–$200 zone acts as critical support, reinforced by multiple bounces in early October. The October 1 plunge (-11.91% on high volume) established a resistance ceiling near $218, now a psychological barrier.
Moving Average Theory
Reddit's trend structure shows bullish alignment across key moving averages. The 50-day MA (approximated near $205) recently provided dynamic support during October’s pullback. The 100-day MA (~$190) and 200-day MA (~$170) both slope upward, confirming the primary uptrend. The October 9 close at $211.7 sits above all three MAs, signaling robust near-term momentum. However, the 50-day MA’s flat trajectory since September warrants monitoring for potential trend fatigue if price dips below $205.
MACD & KDJ Indicators
The MACD histogram turned positive in early October, reflecting recovering momentum after a bearish crossover in late September. This aligns with the KDJ oscillator, where the %K line (39) and %D line (42) are rising from oversold territory (<30 on September 30). However, KDJ remains below the 50 midpoint, suggesting moderate bullish momentum rather than overbought conditions. Divergence emerged in late September when price hit $271.99 while MACD peaked lower, foreshadowing the subsequent correction. Currently, both indicators support upside continuation but lack overextension signals.
Bollinger Bands
Bollinger Bands (20-day) contracted sharply in late September—indicating reduced volatility—before expanding during October’s rebound. Price recently pierced the upper band ($210) on October 9, typically signaling short-term overbought conditions. This follows a mid-band ($205) retest on October 7, which acted as support. The band expansion coinciding with the breakout suggests strong directional conviction, though a mean-reversion pullback toward $205–$208 may follow to absorb excess volatility.
Volume-Price Relationship
Volume trends validate recent bullish reversals: the October 3 rally (+3.13%) occurred on 8.46M shares (above 30-day avg), while the October 9 surge (+4.65%) saw 5.17M shares—moderate but sufficient for a follow-through day. However, the September 30–October 1 sell-off recorded the year’s highest volume (15.77M and 48.85M shares), establishing distribution near $240. Current volume profiles support upside sustainability if turnover remains above 5M shares during advances but would weaken below 4M shares during pullbacks.
Relative Strength Index (RSI)
The 14-day RSI rebounded from nearly oversold territory (34 on October 1) to 57 currently, reflecting recovering momentum. This neutral position allows room for further upside before testing overbought thresholds (>70). Notably, bearish divergence occurred in mid-September when RSI peaked at 76 while price made higher highs, preceding the 18% correction. Current RSI trajectory aligns with bullish momentum but does not yet flag exhaustion.
Fibonacci Retracement
Applying Fibonacci to the June–September uptrend (low: $121.29, high: $271.99), retracement levels pinpoint key support/resistance zones. The 38.2% level ($217) and 50% level ($196.50) proved pivotal, with the October 9 low bouncing precisely at the 50% retracement. Confluence exists at the 61.8% level ($176), which aligns with the August consolidation zone. Resistance now converges near $228 (23.6% retracement), overlapping with the September 24 low.
Confluence and Divergence Insights
Confluence is evident at $195–$200 (support) via candlestick reversals, 50-day MA, and Fibonacci 50% level. A break below this zone may target $170–$175 (61.8% Fibonacci + 100/200-day MAs). Upside confluence at $228–$240 combines Fibonacci 23.6%, prior swing highs, and Bollinger Band expansion signals. Bearish divergence between September’s RSI/MACD peaks and price highs preceded meaningful corrections, while current indicators show nascent alignment with the rebound. Volume, however, lags recent breakouts versus distribution phases—a cautionary note for sustainability. Probabilistically, the setup favors continued upside toward $228 unless $195 support fails.