WBD shares surge 4.49% on four-day rally, 20.33% gain signals bullish breakout driven by golden cross and rising wedge pattern.

Warner Bros (WBD) has surged 4.49% in the latest session, extending its four-day rally with a cumulative gain of 20.33%. This sharp price action suggests a potential breakout from recent consolidation, supported by high trading volume (103.65 million shares) and a closing price near the session high ($29.53). The candlestick pattern over this period resembles a bullish engulfing formation, where the most recent bullish candles (29.53) fully eclipse prior bearish bodies. Key support levels appear to be forming around $24.50 (December 4-5 range) and $22.00 (October 2024 base), while resistance is evident at $30.00 (implied by recent volatility).
Candlestick Theory
The four-day rally has created a rising wedge pattern, with higher highs and higher lows compressing price into a narrowing channel. This pattern often precedes a breakout, with the current close above the wedge’s upper boundary suggesting continuation of the uptrend. Critical support at $27.23 (December 8 low) and resistance at $29.81 (December 10 high) are confluence points with Fibonacci retracement levels. A break above $30.00 could target the 127% extension at $31.50, while a retest of $27.23 may trigger a pullback.
Moving Average Theory
Short-term momentum is confirmed by the 50-day MA crossing above the 100-day MA, forming a golden cross. The 200-day MA ($23.50) acts as a strong support level, with the current price (29.53) trading 25.7% above it. The 50-day MA ($26.80) and 100-day MA ($25.10) are both ascending, reinforcing the bullish bias. However, the 200-day MA’s steep angle suggests potential for a pullback if the 50-day MA flattens.
MACD & KDJ Indicators
The MACD histogram has turned positive, with the line crossing above the signal line, indicating strengthening bullish momentum. The stochastic oscillator (KDJ) shows overbought conditions (K=85, D=78), suggesting a potential near-term correction. Divergence between the KDJ’s overbought reading and the MACD’s rising trend hints at a possible short-term pullback before resuming the uptrend.
Bollinger Bands
Volatility has expanded, with the 20-day Bollinger Bands widening to 3.2% (vs. 2.1% in mid-December). The current price ($29.53) is near the upper band, indicating overbought conditions. A break above the upper band could trigger a continuation of the trend, while a retest of the lower band ($25.00) may provide a buying opportunity.
Volume-Price Relationship
Volume has surged to 103.65 million shares, a 33% increase from the prior session, validating the recent price strength. The volume profile shows a positive divergence, with higher volumes accompanying higher closes. This supports the sustainability of the rally, though a sharp volume contraction would signal waning momentum.
Relative Strength Index (RSI)
The 14-day RSI is at 68, approaching overbought territory (70). While this suggests a potential short-term correction, the RSI’s rising trend aligns with the bullish MACD, indicating the uptrend may persist. A drop below 50 would invalidate the bullish case, while a close above 70 could extend the rally.
Fibonacci Retracement
Key Fibonacci levels from the October 2024 low ($9.53) to the December 2025 high ($30.00) include 38.2% at $22.00 and 61.8% at $25.50. The current price ($29.53) is near the 100% extension, suggesting a potential pause before testing the 127% target at $31.50. Confluence between the 200-day MA ($23.50) and the 38.2% retracement level ($22.00) reinforces their significance as support.

The analysis highlights a strong bullish bias supported by confluence between the golden cross, rising MACD, and bullish candlestick patterns. However, the RSI and KDJ indicators suggest caution for overbought conditions, with a potential pullback to $27.23–$25.00 as a likely scenario. Traders should monitor the 200-day MA and Fibonacci levels for confirmation of trend continuation or reversal. Divergences in momentum indicators may indicate a need for risk management, particularly if volume declines or the RSI drops below 50.