Warner Bros (WBD) Surges 4.33% as Bulls Rally Near 52-Week High – What’s Fueling the Momentum?

Summary
• Warner Bros (WBD) trades at $29.485, up 4.33% intraday, nearing its 52-week high of $29.5.
• Intraday range spans $28.855 to $29.5, with turnover hitting 36.24 million shares.
• Technical indicators show RSI at 82.05 (overbought) and MACD histogram at 0.335 (bullish divergence).

Warner Bros (WBD) is surging on a sharp intraday rally, driven by a mix of technical momentum and speculative positioning. With the stock trading near its 52-week high, traders are scrutinizing whether this breakout will hold or reverse. The entertainment sector remains fragmented, with Disney (DIS) lagging behind WBD’s explosive move.

Technical Bull Run Gains Momentum
The 4.33% surge in WBD is primarily fueled by a confluence of technical factors. The RSI (82.05) signals overbought conditions, while the MACD (1.429) and positive histogram (0.335) confirm a short-term bullish trend. The stock has pierced its upper Bollinger Band ($27.16) and is now trading just $0.015 below its 52-week high. This suggests a breakout scenario driven by algorithmic buying and retail momentum rather than fundamental catalysts. The absence of company-specific news further points to technical-driven speculation.

Entertainment Sector Trails as Disney (DIS) Gains 0.89% – WBD Outperforms on Technical Rally
While WBD surges 4.33%, the broader entertainment sector remains subdued. Disney (DIS), the sector leader, is up only 0.89% intraday, highlighting WBD’s divergence. This disconnect suggests WBD’s move is driven by speculative positioning rather than sector-wide demand. The sector’s muted performance underscores that WBD’s rally is an isolated technical event, not a broader industry trend.

Options Playbook: Capitalizing on WBD’s Breakout – Key Contracts and ETFs
• MACD: 1.429 (bullish), Signal Line: 1.095 (positive), Histogram: 0.335 (divergence)
• RSI: 82.05 (overbought), Bollinger Bands: $20.72–$27.16 (breakout confirmed)
• 200D MA: $13.91 (far below current price), 30D MA: $23.36 (support level)

WBD’s technical setup favors aggressive bulls. The stock is trading near its 52-week high with RSI in overbought territory, suggesting a potential continuation or consolidation. Key levels to watch: $29.5 (52W high) and $23.94 (middle Bollinger Band). The absence of leveraged ETF data limits direct sector exposure, but options offer high leverage. Two top options from the chain:

• WBD20251219C29: Call option with strike $29, expiring Dec 19. IV: 23.39% (moderate), Leverage Ratio: 39.81% (high), Delta: 0.676 (moderate sensitivity), Theta: -0.1006 (rapid time decay), Gamma: 0.315 (high sensitivity to price swings), Turnover: 480,245 (liquid).
This contract offers a balance of leverage and liquidity. A 5% upside from $29.485 (to $30.96) would yield a payoff of $1.96 per contract, aligning with its high gamma and moderate delta.

• WBD20251219C30: Call option with strike $30, expiring Dec 19. IV: 29.46% (moderate), Leverage Ratio: 81.83% (very high), Delta: 0.373 (lower sensitivity), Theta: -0.0716 (moderate time decay), Gamma: 0.263 (high sensitivity), Turnover: 659,739 (extremely liquid).
This contract’s high leverage ratio (81.83%) and moderate IV make it ideal for a continuation of the bullish trend. A 5% upside would generate a $0.96 payoff, leveraging its high gamma for potential rapid gains.

Aggressive bulls should consider WBD20251219C30 into a breakout above $30.50.

Backtest Warner Bros Stock Performance
The backtest of Warner Bros. Discovery (WBD) after a 4% intraday increase from 2022 to the present shows mixed results. While the 3-day win rate is high at 51.61%, the 10-day and 30-day win rates are lower at 49.25% and 48.39%, respectively. This suggests that WBD tends to perform well in the short term but may face challenges in maintaining gains over longer periods. The maximum return during the backtest was 6.96%, which occurred on day 59, indicating that while WBD has the potential for positive returns, it may not consistently exceed this level.

Bulls on a Roll – What to Watch Before the December 19 Expiry
WBD’s 4.33% surge is a technical-driven breakout with high momentum, but sustainability depends on holding above $29.5. The RSI’s overbought condition and MACD divergence suggest a potential pullback, but the high gamma and liquidity in the $29–$30 call options provide tools to capitalize on either continuation or a sharp reversal. Meanwhile, Disney (DIS)’s 0.89% gain highlights the sector’s lack of broad support. Traders should monitor the 52-week high and key moving averages (30D at $23.36, 200D at $13.91) for directional clues. If $29.5 holds, WBD20251219C30 offers explosive upside.