Software stock AppLovin Corp (NASDAQ:APP) has fallen sharply since its early-June peak, down 12.2% since the start of the month. The shares are on the rise today, however, up 2.9% to trade at $345.27 at last glance, and flashing a historically bullish signal to boot.
Per Schaeffer’s Senior Quantitative Analyst Rocky White, the recent pullback has pulled APP back to its 50-day moving average. More specifically, the stock is within 0.75 of the trendline’s 20-day average true range (ATR) after spending at least 80% of the last 10 days and 80% of the last two months above it. Within these parameters, six other signals occurred in the past three years. APP was higher one month later 67% of the time after those instances, averaging an 8.3% gain.
A move of similar magnitude would have the shares making another run at $400, an area that has alternated between support and resistance in the last year. Since June, APP is 343% higher, though most of those gains have come from 2024, when the software name was the best-performing stock on the Nasdaq.
When weighing in on the equity’s next move, options look like a good way to go. AppLovin stock’s Schaeffer’s Volatility Index (SVI) of 60% ranks in the low 16th percentile of its annual range, meaning options traders are pricing in low volatility expectations.
APP has outperformed options traders’ volatility expectations over the last 12 months, making this an excellent opportunity to weigh in with options. This is per its Schaeffer’s Volatility Scorecard (SVS) of 81 out of 100.
