Reddit Stock Surges 4.80% To $234.77 In Four-Day 10.83% Rally

Reddit (RDDT) shares closed at $234.77 in the latest session, marking a 4.80% gain and completing a four-day rally that has seen the stock advance 10.83% amid above-average trading volume. This upward momentum establishes the context for our technical assessment of the security.
Candlestick Theory
Recent sessions exhibit bullish continuation patterns, particularly three white soldiers over the last three days closing near session highs. Significant resistance is evident near $237.35 (today's high), coinciding with the psychological $240 level. Support now forms around $224.30 (today's low), aligning with the gap-fill zone following the explosive 17.47% rally on 2025-08-01. The August 1st long white candle at $188.64 serves as major foundational support.
Moving Average Theory
The 50-day moving average ($167.50) maintains a decisive upward slope beneath the 100-day ($141.20) and 200-day ($130.80), confirming a major long-term bullish trend. Crucially, the current price trades above all three major averages, with the 50-day providing dynamic support during July consolidation. Recent price action has pushed further above the rising 50-DMA, reinforcing bullish momentum. A bullish golden cross occurred in Q1 2025 when the 50-DMA crossed above the 200-DMA, foreshadowing the current uptrend.
MACD & KDJ Indicators
The MACD (12,26,9) shows a bullish crossover above the signal line with expanding histogram bars, confirming strengthening upside momentum. Meanwhile, the KDJ indicator presents a nuanced picture: the %K line (86) has crossed above %D (82) in overbought territory (>80). While this signals short-term momentum, it flags overextension risks. The sustained high stochastic readings during this rally indicate powerful upside pressure, though the convergence of overbought signals warrants caution.
Bollinger Bands
Price consistently rides the upper Bollinger Band ($228.40), indicating strong bullish momentum. Bandwidth expansion from recent contraction reflects increasing volatility favoring bulls. Historically, similar band expansions (e.g., mid-May 2025) preceded sustained directional moves. Current upper band penetration suggests near-term consolidation or minor pullback may occur, but the primary trend remains powerfully intact with no reversal signals emerging from the bands.
Volume-Price Relationship
The 4-day rally occurred on sequentially increasing volume (+55% vs 30-day average), confirming buyer conviction. Major breakout on 2025-08-01 surged 17.47% on peak annual volume (27.2M shares), establishing high conviction support. Bearish volume divergences are absent during this advance, though monitoring whether volume sustains above average is crucial for continuation. Distribution days remain notably absent throughout the uptrend.
Relative Strength Index (RSI)
The 14-period RSI currently prints at 78, exceeding the overbought threshold (70). While this indicates strong momentum, it also signals stretched short-term conditions. Historically, RSI readings above 75 in 2025 (e.g., April 9th) preceded 5-10% pullbacks. However, during powerful uptrends, RSI can remain elevated for extended periods. This reading warrants heightened vigilance for profit-taking but doesn't inherently negate the trend without bearish confirmation.
Fibonacci Retracement
Using the swing low of $81.74 (2024-10-29) to the high of $237.35 (2025-08-13), key retracement levels emerge: 23.6% ($196.50), 38.2% ($172.80), 50% ($159.50), and 61.8% ($146.30). The recent July consolidation respected the 38.2% level ($172.80) as support before resuming its ascent. The current rally faces minor resistance near the 123.6% extension ($243), while the 23.6% level ($196.50) now serves as major support should any significant retracement materialize.
Confluence & Divergence
Significant confluence exists around $225-$230, where the current 4-day rally, 50-DMA support, and Bollinger Band midline converge with high-volume nodes. This zone provides robust near-term support. Conversely, the most notable divergence emerges between overbought oscillators (RSI 78, KDJ >80) versus sustained price highs and MACD momentum. This suggests potential consolidation may precede further upside. Bullish confirmation stems from alignment between rising MAs, volume-supported price action, and Fibonacci positioning.