WBD Breakaway Gap in Markup: Buy the Pivot, Aim for the 20 Handle

Snapshot and context

• Ticker: WBD (Warner Bros. Discovery)
• Currency: USD
• Current price (after-hours): 19.46
• Reg-session 2025-09-15 range: 18.41–19.60; close ≈ 19.46 with heavy volume (~104M shares vs massive 298M and 286M on 9/11–9/12)
• Prior two sessions: 9/11 breakaway gap from ~12.6 to >16 with extreme volume; 9/12 continuation to 19.33 close 18.87. Today pushed through prior high to 19.60 and settled near highs.

Price action narrative (last 4 months to now)

• May–July: Base and steady uptrend from ~9 to ~13.7 with constructive higher highs/lows.
• Early Aug: Sharp risk-off into ~10.8–11; then gradual repair back to ~12.3 by 9/10.
• 9/11: Breakaway gap on news/catalyst, +30% day with volume explosion; closes at 16.17. Structure shifts from accumulation to markup (Wyckoff Phase E).
• 9/12: Strong follow-through, high 19.33, close 18.87. Confirms gap is breakaway (not exhaustion) with no immediate fill.
• 9/15: Bull flag breakout attempt with new swing high 19.60; closes strong at 19.46. Buyers defended dips around 18.9–19.1 intraday.

Multi-timeframe trend assessment

• Daily trend: Strong bullish. Sequence of higher highs/higher lows post-gap. Price above all key moving averages by a wide margin.
• Intraday (hourly): Constructive stair-step pattern; reclaimed and held intraday VWAP on multiple tries; buyers active on pullbacks to 19.0–19.2.

Support and resistance (levels with rationale)

• Immediate resistance: 19.60 (today’s high). Psychological and options magnet: 20.00. Above that, R2 pivot projection ~20.34; then 21.08 (R3) if momentum extends.
• Immediate support: 19.15–19.20 (session pivot/VWAP zone). Below: 18.72 (S1), then 17.97–18.00 (S2/round), deeper structural support 17.2–17.5 (9/12 low/9/11 demand zone). Gap base at 16.2 (9/11 close) is major, but far.

Classical pivot points (derived from 9/15 H/L/C = 19.595/18.41/19.46)

• Pivot (P): 19.155
• R1: 19.900
• S1: 18.715
• R2: 20.340
• S2: 17.970
• R3: 21.085
• S3: 17.530 Interpretation: Price closed above P and near R1; probability-weighted path often tests R1/R2 the following session if momentum persists.

Volume and breadth

• Volume expansion on the gap and follow-through is a hallmark of breakaway strength. Today’s volume decelerated but remained elevated relative to pre-gap normals, implying healthy digestion rather than distribution.
• On-Balance Volume (OBV) would be making new highs; Accumulation/Distribution skewed positive (closes in upper ranges on high volume).

Volatility regime

• True Range compressed today vs 9/12, but remains elevated (H-L 1.185). 14-day ATR has spiked, reflecting a new higher-volatility regime typical after a structural break. Expanded Bollinger bandwidth indicates trend acceleration; price is riding the upper band with controlled mean reversion—bullish continuation setup, albeit with higher whipsaw risk.

Momentum indicators

• RSI(14) daily is likely 72–80 given the magnitude—overbought but in a bull regime where overbought can persist. No bearish divergence visible across last three sessions (price and momentum both made higher highs).
• MACD: Strongly positive; histogram expanding; signal line crossover likely occurred on 9/12. Momentum thrusts like this often see 3–7 session persistence before meaningful pullback; we are in session 3 post-gap.
• Stochastics: Embedded >80, consistent with trend.

Moving averages and trend structure

• Price is far above 20D SMA (~12.5–13.5) and 50D SMA (~12.0–12.8). While extended, this is typical for a breakaway gap; the key is whether it forms a tight flag above former resistance. Short MAs (5/10D) would be sharply rising and below price; any pullback towards 18.7–19.0 likely gets dip-bought initially.

Ichimoku view (inferred)

• Price well above cloud; cloud likely flipped bullish; Tenkan above Kijun, both sloping up; Lagging span above price. This is a clear bullish configuration. Kijun equilibrium likely sits ~17–18; first magnets on weakness are 18.7–19.0.

Fibonacci mapping

• Flagpole (9/10 close ~12.54 to 9/12 high 19.33) = 6.79. 38.2% retrace = 16.73; 50% = 15.94; 61.8% = 15.15. Price never approached 16–17 after the gap—shallow retracement is bullish. Extension from 9/11 close 16.17 using 61.8–100% projection for the 9/12 move suggests targets 19.9–20.9, aligning with R1–R3 and the psychological 20.

Pattern diagnostics

• Breakaway gap + bull flag: The two-session digestion above 18.7, followed by a push through 19.33 to 19.60, forms a classic continuation pattern. The lack of heavy selling on pushes into new highs supports the bull flag breakout thesis.
• No topping patterns (no shooting star/engulfing on the daily) as of 9/15; intraday wicks were bought.

Elliott Wave count (heuristic)

• Wave 1: 12.5 to 16.2 (9/11). Wave 2: shallow intraday digestion 16–17 into 9/12 open. Wave 3: 16.2 to 19.6 underway. Typical Wave 3 targets 1.618 of Wave 1 from Wave 2 pivot maps into 20–21 area, consistent with pivot R2/R3.

Market profile and VWAP

• Intraday volume-by-price built a thick node around 19.0–19.3 (value area). That becomes near-term support. VWAP oscillations resolved to the upside into the close, signaling buyers in control.

Options/psychological levels

• 20 is a major round number and likely a high open interest strike. Gamma dynamics can pin price around 20 on the next session if call OI dominates, yielding either a magnet into 20 or a brief overshoot then mean-revert to 20 into the close.

Risk factors and invalidation

• Main risk: Mean reversion from overbought/extended conditions; headline risk given catalyst-driven move; and broad-market fragility. A decisive close back below 18.70 (S1 and value-area low) would indicate momentum failure and raise gap-fill odds toward ~18 and potentially 17.5.

24-hour scenarios (probabilities are heuristic)

• Bullish continuation (60%): Early dip toward 19.0–19.2 gets bought; push through 19.60 to test 19.90–20.34 (R1–R2). Close near 19.9–20.2.
• Range consolidation (25%): Chop between 18.9 and 19.8; net close 19.3–19.6 as market digests gains.
• Bearish fade (15%): Lose 19.0 and VWAP; test S1 18.72; weak bounce; close 18.7–19.0. This likely precedes 1–2 more sessions of consolidation before another attempt higher.

Strategy integration and conclusion

• Trend, momentum, breadth, and pattern alignment all favor the long side. The breakaway gap reduces near-term gap-fill probability; volume structure shows accumulation above 19. The pivot stack points to 19.90 then 20.34 as the next logical magnets. Risk is elevated, so entries should be on controlled pullbacks into the pivot/VWAP band rather than chasing breakouts blindly.

Trade plan (24–48h swing/intraday hybrid)

• Bias: Buy dips (long). Avoid chasing above 19.60 without a pullback unless momentum breadth is exceptional at the open.
• Entry: Limit buy near 19.10–19.20 (pivot/VWAP). If strong open gaps above 19.7, wait for a pullback to 19.40–19.50 to avoid slippage.
• Target: 20.34 (R2) within 24h; stretch 21.08 (R3) if momentum spike and market risk-on.
• Stop (discipline, not requested but essential): 18.70 (S1) on a closing basis or intraday hard stop 18.65; risk ≈ 0.45–0.55.
• Risk/reward: Entry 19.15 to target 20.34 = +1.19 vs risk ~0.50 → R:R ≈ 2.4:1.

Bottom line: The setup is a textbook post-breakaway bull flag continuation with supportive volume and momentum. Probability favors a probe of 19.9–20.3 in the next session. Execute via a buy-the-dip plan at the pivot rather than at the highs to balance momentum with risk control.