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RDDT soars: here are the levels to watch in case we see a dip in the price

Alejandro Zambrano Alejandro Zambrano 26/03/2024
RDDT soars: here are the levels to watch in case we see a dip in the price RDDT soars: here are the levels to watch in case we see a dip in the price
RDDT soars: here are the levels to watch in case we see a dip in the price Alejandro Zambrano

It is difficult to find fundamental analyst that is positive on Reddit; not even Reddit's own users on the infamous subreddit r/WallStreetBets are upbeat about the stock.
 

One Reddit user said: "Really surprising. I thought it would go up before it tanks...but it looks like it won't tank soon." However, that has not stopped the share price from offering trading opportunities since it went live on the New York Stock Exchange last March 21. RDDT is likely the meme stock of 2024. Meme stocks are shares of companies that gained popularity from online hype. The cult-like following rallies the price upwards despite the company lacking in value.
 

As for valuations, it is hard to say how much they should be worth, but it is clear that the company needs to turn a profit and stop losing money at some point.
 

The technicals are much clearer. On the left in the chart below, we witnessed a breakout from a triangle pattern with a target of $55, which was met yesterday. Today, the stock will start trading roughly 11% higher than yesterday's closing price, a run-up of approximately 44% from yesterday's low. Some traders will likely book profit as the market opens.
 

If the price quickly declines, from which levels could the price bounce from before trying to reach the old highs?
 

If we see a similar 21% drop, as we saw on Thursday last week, from the current pre-market price of 66 dollars, the price would reach circa $52.5. Also, from $52.5 to $49.90, we find several interesting technical levels: a local high on Thursday, a local high and low on Monday, making this a likely strong support zone. What would happen if the price trades below this level? The price could keep on trading lower, but most likely it will trade sideways.
 

In the case, traders can't wait for such a deep pullback. The $56.50 could come into play. It was a local high for both the IPO day and March 26. In either case, given the speculative nature, more caution than necessary is warranted.
 

RDDT 5-minute chart
 


 

Do you think RDDT’s has potential to rise or will it plummet? Log in to ThinkTrader and go long or short to trade your view today!

Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.

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Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice. ThinkMarkets will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information.
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