Applovin Stock Plunges 12.35% In Three Days As Technicals Signal Bearish Momentum

Applovin (APP) concluded the most recent session with a 5.65% decline, marking its third consecutive daily loss and bringing the three-day cumulative decline to 12.35%. This selling pressure positions the stock at a critical technical juncture, warranting a multi-indicator assessment.
Candlestick Theory
Recent sessions display a pronounced bearish momentum sequence. The latest trading day formed a long red candle with a high of $344.76 and close near the low at $324.91, indicating persistent selling pressure. This follows a similar bearish candle on June 18th (open $361.89, close $344.37) and completes a three-candle pattern reflecting accelerating downside momentum. Key support emerges at the $320-$325 zone, where the stock has historically found footing during previous pullbacks. Resistance now crystallizes around $360-$365, aligning with last week’s consolidation range.
Moving Average Theory
The 50-day moving average (∼$355) has crossed below the 100-day MA (∼$370), signaling deteriorating medium-term momentum. More critically, the 200-day MA (∼$320) coincides with the current price, representing a major inflection point. The sustained trading below the 50-day and 100-day MAs confirms a bearish short-term bias, though the 200-day MA offers potential stabilization. A decisive close under the 200-day MA would indicate a longer-term trend reversal.
MACD & KDJ Indicators
The MACD histogram remains entrenched in negative territory, with the signal line dominating the MACD line—a classic bearish configuration. Both K and D lines in the KDJ oscillator are near 20, approaching oversold territory but still descending, reflecting undiminished downward momentum. While not yet at extreme lows (<10), the absence of bullish divergence suggests near-term caution prevails before potential exhaustion.
Bollinger Bands
Bollinger Bands have expanded notably during the three-day sell-off, reflecting surging volatility. Price is now pressing against the lower band ($315-$320), which typically acts as a temporary support or oversold bounce zone. The sharp band expansion after a period of contraction signals a volatility breakout favoring bears, though reversions to the mean often follow such events. A sustained breach below the lower band would intensify downside risk.
Volume-Price Relationship
Recent distribution days featured elevated volume (6.95M shares vs. 30-day avg ∼6M), validating the bearish breakout with conviction. However, the June 16th rally on moderate volume (3.54M shares) lacked confirmation, revealing weak buying interest. Current volume patterns align with the downtrend’s sustainability, but climactic selling volumes may precede short-term exhaustion near the $320 support.
Relative Strength Index (RSI)
The 14-day RSI has plunged to 33, nearing oversold territory (<30). While this warns of potential near-term relief, the lack of positive divergence—where RSI stabilizes as price declines—suggests underlying weakness. RSI’s predictive reliability remains limited in strong trends, and its current trajectory implies further downside before stabilization.
Fibonacci Retracement
Applying Fibonacci levels to the dominant downtrend from the February 18th peak of $519.79 to the June 20th low of $321.68 reveals critical thresholds. The 38.2% retracement ($387) aligns with recent resistance, while the 50% level ($421) capped recovery attempts in early June. More immediately, the 23.6% retracement ($366) converges with moving average resistance, reinforcing its technical significance. A failure to reclaim $366 would reinforce bearish control.
Confluence & Divergence Observations
Notable confluence exists at the $320-$325 zone, where the 200-day moving average, Bollinger lower band, and psychological support intersect. Conversely, KDJ’s oversold signal diverges from MACD’s entrenched bearishness, suggesting momentum indicators lack alignment. The volume-backed breakdown below $360 supports bearish continuity, but RSI’s proximity to oversold levels cautions against aggressive near-term shorts.
In summary, Applovin exhibits a structurally bearish posture confirmed by moving averages, volume, and MACD. While oversold signals (RSI, KDJ) and the 200-day MA support hint at potential stabilization near $320, a recovery above $360 is required to neutralize immediate downside momentum. Traders should monitor the $320 support breach for continuation risk versus the development of reversal candlesticks for tactical entry opportunities.