Warner Bros (WBD) shares surge 4.41% as technical indicators confirm bullish trend with 10.96% two-day rally

Warner Bros (WBD) has surged 4.41% in the latest session, extending a two-day rally with a cumulative gain of 10.96%. This sharp price action suggests a strong short-term bullish bias, warranting a detailed technical analysis to assess sustainability and potential reversals.
Candlestick Theory
Recent price action reveals a robust bullish engulfing pattern, with the close near the session high (27.23) following a prior consolidation phase. Key support levels emerge at 24.54 (previous close before the rally) and 22.86–23.09 (prior troughs in mid-November). Resistance is clustered around 28.165 (December 8 high) and 26.10 (December 5 high). The absence of long shadows in recent candles indicates decisive buying momentum, though a failure to break above 28.165 may trigger profit-taking.
Moving Average Theory
Short-term momentum is confirmed by the 50-day MA crossing above the 200-day MA, signaling a bullish trend. The 50-day MA currently sits near 23.50, while the 200-day MA is closer to 20.00, suggesting a steep upward trajectory. However, the 100-day MA at ~22.00 acts as a critical baseline; a retest below this level could invalidate the trend. Confluence between the 50-day MA and the recent price action implies the uptrend remains intact, but traders should monitor for a potential MA crossover bearish signal if the 200-day MA rises closer to the price.
MACD & KDJ Indicators
The MACD histogram has expanded sharply, reflecting accelerating bullish momentum, with the MACD line (12, 26, 9) trending upward and above the signal line. The KDJ indicator (14, 3, 3) shows K near 85 and D near 75, suggesting overbought conditions. A bearish divergence may emerge if K fails to rise with price, though the current alignment of MACD and KDJ supports continuation.

The RSI (discussed below) reinforces overbought concerns, but the absence of a bearish crossover in KDJ suggests immediate reversal risk is moderate.
Bollinger Bands
Volatility has expanded significantly, with the 20-day Bollinger Bands widening to 2.50 (vs. ~1.50 in late November). Price is currently near the upper band (28.165), indicating overbought territory. A break below the middle band (25.00–25.50) could trigger a retracement toward the lower band (~21.50). However, the recent expansion suggests momentum may persist until the bands contract again, likely requiring a pullback into the 24.00–25.00 range.
Volume-Price Relationship
Trading volume has spiked to 165.97 million shares, a 40% increase from the prior session, validating the strength of the rally. However, volume distribution shows uneven participation, with higher volumes during the initial leg up (Dec. 4–5) compared to the recent surge. This suggests retail or speculative buying may dominate, increasing the risk of a reversal if volume tapers. A sustained drop in volume during an uptrend would weaken the bullish case.
Relative Strength Index (RSI)
The 14-day RSI is near 75, entering overbought territory, with historical corrections typically occurring after 3–5 days in this range. While this does not guarantee a reversal, the RSI’s failure to form higher highs despite rising price indicates potential exhaustion. A bearish signal would materialize if the RSI falls below 60, targeting a retracement to 50–55 as a probable support zone.
Fibonacci Retracement
Key Fibonacci levels from the November 1–December 8 move (12.00–28.165) include 23.6% at ~26.30, 50% at ~24.00, and 61.8% at ~22.30. The 24.00–24.50 range is a critical confluence of support (Fibonacci 50%, prior consolidation, and 50-day MA). A break below 22.30 would target the 19.50–20.00 level, aligning with the 200-day MA and September 2025 lows.

Confluence and Divergences
The most compelling confluence occurs at 24.00–24.50, where Fibonacci, moving averages, and prior support converge. A sustained break above 28.165 would validate a continuation pattern, while a close below 24.00 would trigger a bearish scenario. Divergence to watch: if the RSI declines while the MACD remains bullish, it may signal a short-term correction. Conversely, a breakout above 28.165 with expanding volume could extend the rally toward 30.00.
Conclusion
Warner Bros’ recent surge is supported by strong candlestick patterns, bullish moving averages, and expanding Bollinger Bands. However, overbought RSI and KDJ levels suggest caution, with a high probability of near-term consolidation. Traders should prioritize monitoring the 24.00–24.50 support zone and watch for volume dynamics to confirm trend sustainability. The key risk is a rapid reversal if Fibonacci and MA levels fail to hold, but the current technical setup remains biased toward continuation.