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Applovin Stock Tumbles Over 4%: Is This a Buying Opportunity or a Warning Sign

Applovin Corp (ticker: APP) faced significant selling pressure in its latest trading session, ending the day with a substantial loss. The sharp decline has put the technology stock on every trader’s radar, raising critical questions about its next move. This analysis breaks down the day’s action and identifies key levels for the upcoming trading day.

On Tuesday, June 18, Applovin stock closed at

16.08, or 4.46%. The negative sentiment bled into after-hours trading, where the stock slipped an additional $0.27 (0.078%) to $344.10, indicating that the downward pressure may not be over.

 

Tuesday’s Trading Day in Review

The trading day for Applovin was a clear victory for the bears. The stock opened at $360.66, slightly above the previous day’s close of

361.89**. However, that was the peak of its strength.

 

From the opening bell, sellers dominated the market, pushing the stock on a consistent downward trajectory throughout the session. The selling intensified in the afternoon, with the stock carving out a day’s low of $338.65. While it managed a slight bounce off this low into the close, finishing at $344.37, the overall price action was decidedly negative.

Key Financial Metrics for Traders

Here is a summary of the vital statistics from the trading day that traders should consider:

  • Closing Price: $344.37

  • Day’s Range: $338.65 (Low) – $361.89 (High)

  • 52-Week Range: $60.67 – $525.04

  • P/E Ratio: 62.21

  • Dividend Yield: None

  • Previous Close: $360.45

The stock’s P/E ratio remains high at 62.21, suggesting that investors have high growth expectations built into the price. Its 52-week range highlights a massive run-up over the past year, making pullbacks like this significant events to watch.

Outlook: Will the Stock Go Up or Down?

Important Note: US markets will be closed on Wednesday, June 19th, for the Juneteenth holiday. The next trading session is on Thursday, June 20th.

The Bearish Scenario:
The momentum is undeniably to the downside. The stock broke through several potential support levels on its way down. The most critical level to watch at the market open on Thursday is the day’s low of $338.65. A break and close below this level could open the door for a further slide, potentially toward the

330 range.

The Bullish Scenario:
Contrarian traders might view this sharp sell-off as a “buy the dip” opportunity. The fact that the stock found some buyers at the

350** psychological level. A decisive move above $350 could signal that the worst of the selling is over and attract new buyers.

 

Is it Right to Invest Today?

This decision should be based on your individual investment horizon and risk appetite.

  • For Long-Term Investors: Applovin has been a top performer over the last year. For those who believe in the company’s long-term potential in the mobile app and advertising technology space, a 4.5% drop could be an attractive entry point to start or add to a position. However, be prepared for volatility, as indicated by the high P/E ratio.

  • For Short-Term Traders: Extreme caution is warranted. The trend is currently your enemy. “Catching a falling knife” is a risky strategy. A more prudent approach would be to wait for the price to stabilize and show signs of a bottom. Watch the price action around the $338.65 level on Thursday. A strong bounce off this level could present a trading opportunity, while a break below it is a clear bearish signal.

Disclaimer: This article is for informational purposes only and is not financial advice. Investing in the stock market involves risk, including the loss of principal. Please conduct your own research or consult with a certified financial advisor before making any investment decisions.

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