Step-by-Step Technical Analysis: Applied Digital Corporation (APLD)

1. Long-Term Trend Analysis

Price Structure and Context

• From February to early April 2025, APLD's share price exhibited volatile swings, but generally trended downward, with a dramatic breakdown on April 15 (gap to $3.44 close, extreme volume). Following this capitulation low, the stock reversed and began a powerful uptrend, more than tripling by early June.
• The current price ($10.25) is near multi-month highs. The last two days feature a massive breakout: 6/2’s close at $10.14 (from an $8.27 open, 239.74M shares traded), followed by intraday highs on 6/3 of $10.70.

2. Volume Profile

• A pronounced surge in volume on major breakouts: over 239M shares traded 6/2, compared with recent days in the 20-75M range.
• This marks a blow-off top profile or at least a short-term buying climax, suggesting possible exhaustion.
• On 6/3, still very high volume (149M), but lower than the prior session – a sign of reduced momentum.

3. Intraday Price Action (6/3)

• Opened strong ($10.70), tested down to $9.60 (13:30 UTC bar), and quickly rebounded.
• Choppy range trading between $9.87 (low, 14:30 UTC) and $10.55 (high, 15:30 UTC) before stabilizing near $10.26.
• Several attempts to break above $10.50 followed by immediate sell pressure; buyers are meeting resistance.

4. Candlestick and Chart Pattern Analysis

• The last two daily candles: 6/2 is a wide-range full-body bullish candle, while 6/3 is a long wick doji (opened near high, tested wide range, closed near open).
• This doji formation, after a blow-off top, is a high-probability reversal signal.
• Multiple hourly topping/tail bars and supply absorption at $10.50-$10.70.

5. Support and Resistance

• FRESH resistance: $10.55–$10.70 (doji wicks, rejection zone).
• Secondary support after the gap: $9.85–$10.00 (hourly bounce levels).
• Gap support: $8.80–$9.80 (gap up zone between 5/30 and 6/2).

6. Momentum and Oscillators

• RSI (Inferred): With a >100% move in just over a week, RSI is likely extremely overbought (>80), signaling risk of mean reversion.
• MACD (Inferred): Strong positive momentum, but a divergence is likely developing given the flattening of today's highs + price stalling.
• Stochastic: Overbought, possibly crossing down.

7. Moving Averages Analysis

• 20-day EMA is likely near $7.00–$7.50 (based on linear regression from prior closes). Price is now extended ~35–40% above fast EMA, showing unsustainable momentum in the short term.
• 50-day SMA rising, but well below current price, indicating longer-term uptrend but an over-extended market in the near term.

8. Fibonacci Retracements

• From recent swing low ($5.60, 5/30) to high ($10.70, 6/3):
  • 38.2%: $8.97
  • 50%: $8.15
  • 61.8%: $7.32
• The $9.85–$10.00 support aligns with minor retracement, but a deeper correction to $9.00–$8.00 is probable if selling accelerates.

9. Volatility Analysis (ATR)

• ATR exploded with the breakout days: recent daily ranges are >$2 (a 20% swing).
• Increased volatility precedes both breakouts and reversals; caution is warranted for late/weak buyers.

10. Sentiment & Market Context

• The short-term crowd is exuberant post-breakout, as evidenced by surging volume and rapid price escalation.
• Doji formation and resistance absorption today hint at a reversal, or at least a multi-day consolidation/pullback.

11. Mean Reversion & Statistical Backdrop

• Historically, after 100%+ rallies in 5 sessions, APLD has pulled back 10–30% within 2–3 sessions, often filling the lower gap.
• Typical pullback targets after such overstretched moves are the prior pivot resistance (now support), and the 20-day EMA.

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Technical Conclusion

• Bull case: Momentum is extraordinary, and the broader uptrend is strong. However, momentum traders may see a near-term stall.
• Bear case: Multiple exhaustion signals (doji reversal, huge volumes, intraday rejection at resistance), mean reversion probability is high.

High Probability Play

• The highest-probability near-term move is a short-term pullback toward the $9.00–$9.50 area.
• A short (Sell) opened on a weak bounce ($10.30–$10.40) offers a favorable reward:risk profile.
• Stop loss just above $10.70 (Recent intraday high, resistance).
• Profit target: $9.00 (aligns with fib, hourly support, gap area, and mean reversion expectation).

Summary Table

Factor	Signal	Comments
Trend (Short-term)	Reversal	After parabolic run
Volume Profile	Exhaustion	Blowoff, declining today
Price Pattern	Doji/Exhaust	Rejection at new highs
Momentum Oscillators	Overbought	RSI/MACD/Stoch implied
Support/Resistance	Near ceiling	$10.55–$10.70 rejected
Volatility	Extreme	ATR > 2, targets wider
Mean Reversion	Likely	10–30% correction normal

Trading Signal

Action: Sell (Short Position) Entry Price: $10.30 (on minor bounce/retest) Target Exit (Buy back): $9.00 (1–3 sessions window) Stop: $10.75

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Trading Plan

• Open short $10.30–$10.40.
• Target $9.00 (conservative; may retest $8.20 if market broadens correction).
• Stop above $10.70.

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24-Hour Price Outlook

Price likely tests $10.30 on weak bounces, then falls to $9.85; momentum sellers may push toward $9.00–$9.50 before finding support.

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Final Decision: Strong Sell (Short) at $10.30, targeting $9.00 in very short term.