Despite a broader tech rebound that has lifted semiconductor, software, and AI names off recent lows, the charts of Dell Technologies and AppLovin still look vulnerable, but for very different reasons. This divergence highlights how broad sector momentum often masks underlying technical risks in individual components.
Dell has already enjoyed a spectacular run on AI-server demand, tripling year to date and recently tagging a record high near $595. That degree of extension leaves the stock prone to mean reversion, even if the fundamental secular thesis remains intact. AppLovin, by contrast, has been a notable laggard, dropping 30% over the last three months to trade near the low end of its range with a broken intermediate trend.
Consequently, near-term softness across both tickers offers tactical opportunities for disciplined investors. Whether fading an overextended high-flyer or shorting a broken software name, the setup reinforces why traders should lean into individual chart dynamics rather than expecting a rising tide to lift all boats equally.
Looking at Dell's daily chart, price action showed extraordinary momentum following a breakout above a $153.82 cup-with-handle pivot on March 16. The stock surged 213% between March and June while sustaining an RSI above the overbought 70 threshold for most of that span, proving that overbought conditions alone do not preclude further upside price expansion.
Powerful earnings reactions have consistently fueled this rally, with major reports on Feb. 27, May 29, and Sept. 2 driving single-day gains between 16% and 33%. While shares hold comfortably above the Aug. 12 cup base trigger at $469.57, recent price action displays signs of fatigue, marked by doji candles on Sept. 9 and Sept. 15 alongside Friday's bearish engulfing pattern.
Adding to caution, a clear bearish RSI divergence has formed; momentum made a lower high here relative to early June even as price pushed higher. This divergence signals that upside momentum is pausing, favoring a near-term pullback toward the $500 level to allow the rising 50-day simple moving average to catch up to price, a 12% drop from current prices. Remain bearish below $595.
Dell Technologies was trading around $579 Monday.
AppLovin, which helps mobile app developers monetize their products, is down 52% over the last year, and now trades 57% below its 52-week high. The stock fell in nine of the 12 weeks ending between June 5 and Aug. 21. Although it has risen in three of the last four weeks it has made up little of the lost ground.
Looking at the daily chart, severe relative weakness stands out against the software sector, as the ratio chart versus the iShares Expanded Tech-Software ETF reflects a sharp decline from July into early August. A bearish death cross was recorded back in March, and price action remains pinned beneath both its downward-sloping 50-day and 200-day simple moving averages.
While a mid-April breakout above a bear flag offered temporary relief, that buying enthusiasm proved short-lived. A June 1 doji candle firmly re-established the primary downtrend, neutralizing upside momentum and reaffirming overhead supply.
A second bear flag structure has now taken shape directly along slippery support at the very round $300 level. Patience is key here, waiting for a decisive breakdown below the $300 trigger opens the door for a continuation move toward $200 by early 2027, a 38% decline from current prices. Maintain a bearish posture below $345.
AppLovin was trading around $329 Monday.
Doug Busch is the senior technical analyst at Barron's Investor Circle. His technical view is added to stock picks, including those published exclusively for Investor Circle readers. A glossary of technical terms is updated regularly with new entries.
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