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Key Takeaways
- AppLovin shares hit a record high Wednesday as the company makes inroads capitalizing on mobile gaming and lucrative new digital advertising markets.
- After bottoming out in December 2022, AppLovin shares have made a V-shaped recovery on healthy trading volume, indicating conviction behind the buying.
- Investors can monitor key retracement levels on AppLovin’s chart at $112, $88, and $55.
- A bars pattern, which takes the trending period following a prior piercing pattern in March 2023 after a four week pullback and repositions it from the most recent piercing pattern’s low, predicts a price target in the stock of around $200.
AppLovin (APP) shares could continue to attract attention Thursday after hitting a record high yesterday as the company makes inroads capitalizing on mobile gaming and lucrative new digital advertising markets.
The Silicon Valley-based company, which offers a range of software products to help app developers market, monetize, and analyze their apps, has seen its shares surge more than threefold since the start of the year, with gains accelerating in recent months after the firm offered a better-than-expected outlook amid soaring demand for its artificial intelligence (AI)-powered AXON advertising technology.
Below, we’ll take a closer look at AppLovin’s weekly chart and use technical analysis to identify important price levels to watch out for.
V-Shaped Recovery
After bottoming out in December 2022, AppLovin shares have made a V-shaped recovery. The move has occurred on healthy trading volume, indicating conviction behind the buying.
More recently, a piecing pattern marked the end of a pullback toward the 50-week moving average in early August, with the stock’s price more than doubling from last month’s low.
Despite the bullish technicals, it’s worth noting the shares remain subject to short-term profit-taking given the relative strength index (RSI) signals overbought conditions with a reading above the key 70 threshold.
Key Retracement Levels To Watch
Amid a retracement, investors should monitor three important chart levels.
The first sits around $112, an area just below Wednesday’s record close where the stock may find support near the November 2021 swing high, which closely aligns with last week’s closing price.
Selling below this level could see the shares decline to the $88 region, a location on the chart where investors may look for buying opportunities near a trendline joining multiple peaks from June 2021 to July this year.
A more significant bearish move could lead to a retest of lower support around $55, where the shares would likely encounter support from the May and August 2021 troughs that formed on the chart shortly after the stock went public in April of that year.
Bars Pattern Price Target
With no overhead price action to work with, investors can use a bars pattern to speculate a price target above the all-time high (ATH). To do this, we take the trending period following a prior piercing pattern in March 2023 after a four-week pullback and reposition it from the most recent piercing pattern’s low, which also formed after month-long retracement. This predicts a price target of around $200.
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As of the date this article was written, the author does not own any of the above securities.