AppLovin Plummets 6.3% as Three-Day Slide Hits 14.9% Amid Bearish Technical Signals

Applovin (APP) fell 6.30% in the most recent session, marking a three-day decline of 14.94%. The stock’s price action and technical indicators suggest a bearish near-term bias, with potential for further downward momentum. Below is a structured analysis of key technical aspects.

Candlestick Theory

The three-day sell-off has formed a bearish engulfing pattern, with the most recent candle closing near its low, indicating strong distribution pressure.

Key support levels emerge at the 52-week low of $244 (December 2025) and the 61.8% Fibonacci retracement level at $434, derived from the January 2026 peak of $698.82 to the February 2026 trough of $244. Resistance is clustered near the 38.2% retracement level at $530 and the 200-day moving average (around $500). A break below $434 could target the next Fibonacci level at $364, while a rebound above $530 may signal a short-term oversold bounce.

Moving Average Theory

The 50-day ($484), 100-day ($467), and 200-day ($452) moving averages are in a descending order, confirming a bearish trend. The price remains below all three, with the 200-day MA acting as a critical psychological floor. A crossover of the 50-day MA above the 200-day MA (death cross) in early March 2025 has reinforced the downtrend. Short-term traders may watch for a potential 50-day MA retest of the 200-day MA as a possible reversal signal, though the broader trend remains bearish.

MACD & KDJ Indicators
The MACD line (-$15) has crossed below the signal line (-$10), confirming bearish momentum, while the histogram shows expanding negative divergence. The KDJ stochastic oscillator is in oversold territory (K=20, D=25), suggesting a potential short-term bounce. However, the lack of bullish divergence (price lows vs. oscillator lows) weakens the case for a reversal. A sustained close above $500 could trigger a KDJ overbought condition, but this remains contingent on volume confirmation.

Bollinger Bands

Volatility has expanded, with the price trading near the lower Bollinger Band ($440–$590 range). This contraction-expansion pattern historically precedes breakouts or breakdowns. The current position near the lower band, combined with declining volume, suggests the downtrend may persist until the bands contract again. A break below the lower band could trigger a volatility spike, extending the decline toward $364.

Volume-Price Relationship

Trading volume has surged during the recent sell-off, with the three-day average volume at $2.5 billion, up from a 90-day average of $1.8 billion. This validates the bearish move, as increased volume typically confirms distribution. However, a divergence in volume (declining volume during further declines) could signal exhausted selling pressure. Traders should monitor volume spikes above $3 billion as a warning of potential short-covering or a reversal.

Relative Strength Index (RSI)

The 14-day RSI is at 28, entering oversold territory. While this may suggest a short-term rebound, RSI divergence (lower lows in price vs. higher lows in RSI) is absent, reducing the probability of a reversal. A bounce above $490 could push RSI into neutral territory (30–70), but a sustained close above $530 would be needed to confirm a trend reversal.

Fibonacci Retracement

Key retracement levels from the January 2026 high ($698.82) to the February 2026 low ($244) are critical. The 61.8% level at $434 and 78.6% at $364 align with prior support zones. A break below $364 could target the 88.6% level at $280, though this remains speculative without additional confirmation. Conversely, a rebound above $530 (38.2%) may attract buyers, particularly if accompanied by a MACD crossover.

Conclusion
The confluence of bearish candlestick patterns, descending moving averages, and oversold RSI suggests a continuation of the downtrend, with $434 as the immediate support. However, the oversold KDJ and RSI hint at potential short-term buying interest. Divergences between price and momentum indicators remain limited, reducing the likelihood of an immediate reversal. Traders should prioritize risk management, with stops below $434 for short positions and cautious long entries above $530, pending confirmation from volume and MACD.