In the US, certain things are ritual greetings that follow a standard script. Deviating from it is considered a bit weird (but it’s also common,…
If you reply to “Watcha doing” with “reading” or something similar, it tends to be a conversation-stopper, because it implies that they interrupted something important. Now, if that is the case, you can say that. (“Studying, can’t talk right now”…) But usually with these kinds of social interactions, you want to leave an opening to continue a conversation.
Now, if you say “Reading about _________” or “Reading "Harry Potter”“, or something like that, then they have the choice to say something about the book / music / etc. "Oh, I love Harry Potter!” insta-friend. Or “You know, I never really got into _________”, and you can say something more about it then.