RDDT – 200 SMA Cleared. Inside Day While Market Sold offReddit, Inc. Class ABATS:RDDTkunal00Been watching RDDT for weeks waiting for the right setup. Thursday the market was weak and RDDT held an inside day right above the 200 SMA. When a stock refuses to sell off while everything else is getting hit — that's institutional accumulation. That's the tell. Base breakout is triggering now. This is the entry. ───────────────────────────────── WHY THE FUNDAMENTALS BACK THE CHART ───────────────────────────────── Most people still think of Reddit as a forum. The numbers tell a completely different story. Q1 advertising revenue came in at $625 million — up 74% year over year. Total revenue $663 million. Gross margins above 90%. That's software-company margin on an ad-driven platform. Free cash flow was $311 million last quarter. And the company just authorized a $1 billion share buyback. Companies burning cash don't buy back stock. This business is generating real money. Q2 guidance is $715 to $725 million revenue — 49% year-over-year growth — and EPS consensus is up 120% year over year. The numbers are accelerating not decelerating. The AI data licensing angle is still early and still real. Google pays Reddit for content licensing and that deal comes up for renewal in 2027. RBC estimates fees could jump 5x to 8x at renewal — that's not a small number. Nearly half of shoppers now verify AI-generated recommendations on Reddit before buying. One in four Redditors purchases a product after seeing their decision validated on the platform. Reddit just presented this data at Cannes Lions alongside META, Google, Snap, and AppLovin as a core 2026 digital ad platform. The market is finally waking up to what Reddit actually is. Loop Capital reiterated Buy with a $260 price target — more than 50% upside from current levels — calling it attractively valued relative to 2027 earnings. That's a firm conviction call on a stock that's been down 24% year to date. ───────────────────────────────── THE SETUP ───────────────────────────────── Stock sold off hard from prior highs. Spent weeks building a base under the 200 SMA. This week it finally cleared it. Thursday the market sold off and RDDT held — inside day, tight range, no give. That's not a coincidence. That's buyers stepping in at a key level and not letting it crack. 200 SMA breakouts after extended bases on quality growth names are some of the most reliable setups in momentum trading. The pattern is clean. The fundamentals back it up. ───────────────────────────────── TRADE PLAN ───────────────────────────────── Pattern: 200 SMA base breakout Relative strength tell: Inside day Thursday while broader market sold off Entry: Breakout trigger above the base Upcoming catalyst: July 7 digital ad trends call — RDDT named alongside META, GOOGL, SNAP, APP Q2 earnings: Next major catalyst in the pipeline ───────────────────────────────── THE RISK ───────────────────────────────── RDDT trades at a premium multiple — 47 times earnings on forward estimates. Any stumble on Q2 revenue or user growth gets punished hard at this valuation. Competition in digital advertising is intensifying. Google AI Search changes could cut Reddit referral traffic before the licensing deal reprices. Rich multiples mean execution has to be perfect. Size accordingly and respect the stop.