Warner Bros. Discovery Jumps 7.4% As Technicals Signal Bullish Reversal

Warner Bros. Discovery (WBD) surged 7.40% to $12.05 on August 13, 2025, marking its second consecutive positive session with an 11.78% cumulative gain. This analysis examines the technical context of this move.
Candlestick Theory
A bullish reversal pattern has emerged following the August 11 low of $10.76. The August 11 candle showed rejection of lower prices (close near the high after touching $10.76), forming a hammer-like pattern. This was confirmed by two strong bullish candles on August 12-13, completing a morning star-like formation. Immediate resistance is evident at $12.23 (August 13 high), with stronger resistance near the $13.00-13.23 swing high from early August. Support now holds firmly at $11.28 (August 13 low), backed by the critical $10.76 swing low.
Moving Average Theory
The price currently trades below the primary moving averages: the 50-day SMA (approx. $12.30), 100-day SMA (approx. $11.90), and 200-day SMA (approx. $10.80). However, the recent rebound from below the 200-day SMA suggests this long-term average provided dynamic support. The 50-day/100-day death cross in late July remains active, though the price’s recovery above the 200-day SMA may signal trend stabilization. Monitoring for a golden cross between shorter-term averages could confirm bullish momentum.
MACD & KDJ Indicators
The MACD histogram has shifted into positive territory following a bullish crossover on August 12, reflecting accelerating upward momentum. Meanwhile, the KDJ indicator exited oversold territory (<20) on August 12, with the K-line (88) and D-line (75) both rising steeply. While not yet overbought, this signals strengthening short-term bullish momentum. Both oscillators align in suggesting the downtrend has paused and a potential reversal is underway.
Bollinger Bands
The bands expanded sharply during the August 7-8 sell-off, reflecting elevated volatility. The price recently rebounded from below the lower band – typically an oversold condition – to challenge the 20-period midline at $11.80. The contraction in band width during the subsequent consolidation suggests declining volatility and potential accumulation. A close above the midline would signal bullish control.
Volume-Price Relationship
Volume confirmation validates the rebound: The August 13 surge occurred on 60.1M shares – the highest volume since July 28 – significantly exceeding the 50-day average. This follows above-average volume (48.5M) on August 12. The volume profile shows accumulation at recent lows, contrasting with distribution during the early August sell-off (62.1M shares on August 8).
Relative Strength Index (RSI)
The 14-day RSI rebounded sharply from oversold conditions (27 on August 11) to 63 on August 13. While now neutral, the swift recovery from sub-30 territory signals momentum reversal. The lack of bearish divergence during the August sell-off (price made lower lows while RSI made higher lows) reduces the risk of immediate downside.
Fibonacci Retracement
Applying Fibonacci levels to the $13.23 (August 7 high) to $10.76 (August 11 low) decline shows the rally has surpassed the 61.8% retracement at $12.30. This strong recovery implies potential for full retracement to the $13.23 high. The 50% level at $12.00 now acts as support, aligning with the psychologically important $12.00 price zone.
Confluence is observed at the $12.00-$12.30 zone, where the 61.8% Fibonacci level, 50-day SMA, and psychological resistance converge. The volume-backed bullish candlestick reversal, MACD/KDJ confirmation, and oversold bounce from the 200-day SMA collectively suggest continued upside potential. However, resistance near $12.23-$12.30 must be decisively overcome to confirm a trend reversal. Traders should monitor whether the current momentum can sustain above this critical confluence zone.