Warner Bros. Discovery Stock Surges 58.73% in Four Days on Record Volume

Warner Bros. Discovery (WBD) shares gained 3.13% in the most recent session, closing at $19.46, marking the fourth consecutive day of gains. This rally has resulted in a cumulative 58.73% appreciation over the past four trading sessions, propelled by extraordinarily high trading volume exceeding 100 million shares.
Candlestick Theory
Recent candlesticks reveal significant volatility, culminating in a powerful bullish breakout. The sessions on 2025-09-11 and 2025-09-12 formed large-bodied bullish candles with minimal upper wicks, demonstrating strong buying conviction as prices surged from $12.57 to $18.87. The subsequent session (2025-09-15) printed a smaller bullish candle with a pronounced upper wick touching $19.595, suggesting initial resistance near the $19.60 level. The close near the session high ($19.46) maintains positive momentum. Key support now resides at the psychological $18.00 zone, with resistance solidified at $19.60 and the major psychological $20.00 barrier.
Moving Average Theory
The explosive rally has propelled the price decisively above the 50-day, 100-day, and 200-day moving averages, signaling a powerful shift towards a robust bullish trend across all significant timeframes. The shorter-term averages (50-day ~$13.69, 100-day ~$12.20) now act as substantial support areas far below the current price, highlighting the magnitude of the advance. The longer-term 200-day average (~$11.30) confirms a major long-term uptrend. The established sequence (price > 50DMA > 100DMA > 200DMA) signifies a golden cross configuration, reinforcing bullish dominance.
MACD & KDJ Indicators
The Moving Average Convergence Divergence (MACD) exhibits exceptionally strong bullish momentum. The MACD line has surged well above the signal line, and the histogram is expanding positively at high levels, confirming powerful upside thrust. KDJ indicators are positioned deep within overbought territory (likely K & D > 80, J potentially > 90 given the velocity). While this signals an extremely strong trend, it also elevates the risk of a short-term consolidation or pullback as overbought conditions become increasingly stretched. Nevertheless, attempting to anticipate a reversal based solely on overbought KDJ during such a momentum-driven surge carries significant risk.
Bollinger Bands
Price action has surged dramatically above the upper Bollinger Band ($16.90 estimated based on recent volatility), indicating an extreme overbought condition characteristic of powerful breakouts or news-driven events. Such pronounced deviation is statistically unsustainable in the immediate term and often precedes a period of consolidation where the price may revert towards the mean (20-period moving average, currently around $13.70). However, the concurrent massive expansion of the bands themselves signifies sharply increasing volatility, which frequently accompanies the initiation of significant new trends. Watch for price consolidation accompanied by band contraction before the next potential directional move.
Volume-Price Relationship
Volume analysis provides critical validation of the recent price surge. Trading volume on the key breakout days (2025-09-11: 298 million shares, +28.95%; 2025-09-12: 286 million shares, +16.70%) was exponentially higher than the prior average, demonstrating exceptionally strong conviction behind the buying pressure. The subsequent session (2025-09-15) still saw significantly above-average volume (104 million shares), suggesting sustained interest, although reduced from the peak breakout days. This robust volume profile significantly increases the probability that this price advance represents a sustainable trend shift rather than a fleeting spike. Declining volume during any potential pullback would be a constructive sign.
Relative Strength Index (RSI)
The RSI has soared into significantly overbought territory, estimated to be well above 80 based on the magnitude of the price gains. While readings above 70 warn of overbought conditions and increasing corrective risk, an RSI persistently elevated above 70 during a strong trend simply signals robust momentum. The current extreme reading warrants caution for near-term exhaustion but does not inherently negate the underlying bullish trend. Traders should monitor for potential bearish divergence (price making new highs while RSI fails to do so) as a more reliable warning sign of weakening momentum.
Fibonacci Retracement
Applying Fibonacci levels to the sharp recovery rally from the significant low near $8.39 (approximately on 2024-12-11) to the recent high of $19.59 (2025-09-15) identifies crucial support levels should a retracement occur. Key retracement zones provide potential entry points: 23.6% ($15.83), 38.2% ($14.49), and the critical 50% level ($13.99). These levels, particularly $13.99-$14.49, converge neatly with the previous resistance zone formed around early August 2025 ($13.00-$13.90) and the rising 50-day moving average, enhancing their significance as potential support areas should profit-taking emerge. Resistance remains uncharted territory above $20.00 until established.
Confluence & Divergences
A strong confluence exists between volume confirmation, MACD bullish momentum, and the decisive moving average breakout, underpinning the established bullish trend. The primary divergence arises between the extreme overbought signals (Bollinger Bands above the upper band, elevated RSI >80, overbought KDJ) and the powerful trend-following signals. This divergence reflects the inherent tension following an explosive, low-probability price surge. While overbought oscillators suggest a consolidation/pullback is increasingly probable near-term, the volume and moving average alignment suggest the overall trend likely retains upward momentum once near-term excesses are absorbed.