Reddit Stock Surges 6.79% to $126.20 Amid Three-Day 9.71% Rally

Reddit (RDDT) shares demonstrated robust momentum in the latest session, surging 6.79% to close at $126.20 on volume of 8.06 million shares. This advance extends a three-day winning streak totaling 9.71% appreciation, with the price probing a critical resistance zone between $125.39 and $126.59 established during March and May 2025. The convergence of high volume and sustained upward movement reflects strong buying conviction, though technical indicators now show proximity to overbought territory that warrants monitoring.
Candlestick Theory
The three-day rally exhibits characteristics of a bullish continuation pattern with consecutively higher highs ($118.12 → $120.30 → $126.59) and higher lows ($110.85 → $112.30 → $121.43). The most recent candle closed near the session high with a small upper shadow ($126.20 close vs. $126.59 high), indicating minimal rejection at the resistance zone. However, the failure to close decisively above the $126.50 multi-month resistance level suggests potential consolidation pressure. Immediate support resides at $121.43 (today's low), followed by the $112.30-$112.77 consolidation base from early June.
Moving Average Theory
The current price maintains bullish alignment above key moving averages: the 50-day MA ($112.70 approximation), 100-day MA ($108.50 approximation), and 200-day MA ($103.90 approximation). The ascending configuration of these averages (50 > 100 > 200) confirms a sustained uptrend across time horizons. Recent consolidation near the 50-day MA in early June provided a springboard for the current breakout, reinforcing this level as dynamic support. The price trading approximately 12% above the 200-day MA implies robust intermediate-term momentum but extends the valuation premium historically.
MACD & KDJ Indicators
The MACD histogram shows strengthening bullish momentum, with the MACD line accelerating above its signal line after a positive crossover near the zero line. This coincides with KDJ readings moving into overbought territory (K-line: 87, D-line: 82), suggesting near-term exhaustion risk. While both oscillators support the current uptrend, their proximity to extreme levels creates divergence vulnerability—particularly if volume diminishes. The KDJ's sustained position above 80 for multiple sessions historically precedes brief consolidations in RDDT's price action.
Bollinger Bands
Price touched the upper Bollinger Band ($126.30 approximation) during today's session, coinciding with the 6.79% surge—a classic sign of strength when occurring after band expansion. The bands had contracted markedly during the sideways consolidation in early June (width: ~$8.50), with the subsequent expansion validating the breakout. While trading at the upper band suggests continuation potential, the bands' 20-period foundation implies mean-reversion tendencies could emerge near $128 resistance if volatility subsides.
Volume-Price Relationship
Volume patterns critically validate the current advance, with turnover increasing sequentially during the three-day rally (4.82M → 6.51M → 8.06M shares)—a hallmark of sustainable breakouts. The volume surge on June 14th (11.7M shares) as price reclaimed the 50-day MA established accumulation, while today's volume exceeded the 20-day average by 32%. This distribution exhibits climactic buying characteristics, though sustainability requires ongoing volume support above 6.5M shares. Divergence would develop on continued gains with diminishing turnover.
Relative Strength Index (RSI)
The 14-day RSI (78.6) has entered overbought territory (>70) for the first time since the March 2025 peak, reflecting rapid short-term momentum. While not immediately bearish during strong trends, the current reading exceeds April 2025 levels that preceded a 22% correction. The RSI's parabolic rise—from 48 to 79 in three sessions—signals overheating. Historical reversions occur near 80 on RDDT, suggesting consolidation is increasingly probable absent fundamental catalysts. Traders should monitor for divergence should price advance further without RSI confirmation.
Fibonacci Retracement
Applying Fibonacci levels to the major downtrend from the $230.41 high (February 2025) to $50.69 low (August 2024), the current price sits between key thresholds. The 38.2% retracement ($119.34) was decisively breached during this rally, acting as immediate support. The 50% level ($140.55) becomes the next major resistance, though the 2025 swing high at $130.11 may provide intermediate resistance. Today's high near $126.59 tested the 41.8% projection level ($126.90), creating a confluence point with horizontal resistance. A sustained breakout would target the 61.8% retracement at $161.76.
Confluence appears strongest at the $126.50-$127.00 zone, where horizontal resistance, the upper Bollinger Band, and the 41.8% Fibonacci projection intersect. This region's breach would signal continuation toward $130.11 and higher retracement levels. The primary divergence exists between overbought oscillators (RSI/KDJ) and unabated price momentum, suggesting potential near-term consolidation despite the bullish structure. Traders should watch for support holds near $121.43 (today's low) and volume confirmation for sustained directional bias.