Reddit (RDDT) shares jumped 11% ahead of Friday's opening bell on news that the social discussion platform will join the S&P 500. Companies that get included in benchmark indexes often see a bump in their share price thanks to purchases by passive index-tracking funds.
Taking a closer look at Reddit's technicals, the price has traded within a symmetrical triangle for most of this year, a chart pattern that can lead to a major directional move upon a decisive breakout.
While today's pop may run into overhead resistance near the 50 and 200 moving averages, a breakout in the weeks ahead potentially opens the door to a significant move higher. To project a longer-term bullish target, we can use the measured move technique. This works by calculating the percentage distance of the symmetrical triangle and adding it to the pattern's top trendline value where a breakout may occur. For example, we apply 115% to $200, which forecasts a bullish target of $430.
Taking a closer look at Reddit's technicals, the price has traded within a symmetrical triangle for most of this year, a chart pattern that can lead to a major directional move upon a decisive breakout.
While today's pop may run into overhead resistance near the 50 and 200 moving averages, a breakout in the weeks ahead potentially opens the door to a significant move higher. To project a longer-term bullish target, we can use the measured move technique. This works by calculating the percentage distance of the symmetrical triangle and adding it to the pattern's top trendline value where a breakout may occur. For example, we apply 115% to $200, which forecasts a bullish target of $430.
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