Applied Digital Corp. (NASDAQ:APLD) stock fell more than 3% Wednesday, bucking a broader rally in technology stocks.
The Nasdaq gained 0.83%, while the S&P 500 rose 0.56%.
Applied Digital remains under pressure as the stock trades below several key moving averages.
Market breadth was also slightly negative, with an advance-to-decline ratio of 0.8. However, technology ranked as the strongest of the 11 major sectors.
That divergence suggests traders are favoring stronger technology names while reducing exposure to higher-volatility laggards.
Applied Digital has also struggled to hold rebounds. As a result, traders may be watching nearby support for signs of either stabilization or another leg lower.
Technical Analysis
Applied Digital shares are trading about 6.2% below their 20-day simple moving average of $26.17. The stock is also 10.5% below its 50-day SMA of $27.43.
The longer-term trend remains weak. Shares are about 27% below the 100-day SMA of $33.63 and 23.5% below the 200-day SMA of $32.12.
The 20-day SMA remains below the 50-day average. The 50-day SMA is also below the 200-day average after a bearish “death cross” formed in August.
Meanwhile, the MACD is below its signal line, while the histogram remains negative. That signals weakening upside momentum.
Traders may watch $24 as near-term support. On the upside, the $29 area could act as resistance.
See More: Top Momentum Stocks
Earnings And Analyst Outlook
Applied Digital is scheduled to report earnings Oct. 7.
Analysts expect a loss of 30 cents per share, compared with a loss of 3 cents a year earlier. Revenue is expected to rise to $134.86 million from $64.22 million.
The stock carries a Buy consensus rating with an average price forecast of $61.65.
UBS initiated coverage with a Buy rating and a $38 price forecast on Sept. 23. Rothschild initiated coverage with a Neutral rating and a $22 forecast on Sept. 21. Wells Fargo started coverage with an Overweight rating and a $50 forecast on Sept. 17.
Benzinga Edge Rankings
Applied Digital has a Momentum score of 29.26 on the Benzinga Edge scorecard, reflecting weak price momentum compared with the broader market.
The stock may need to reclaim resistance near $29 before the technical setup becomes more constructive.
ETF Exposure
Applied Digital has a 4.08% weighting in the Global X Data Center & Digital Infrastructure ETF (NASDAQ:DTCR). It also represents 3.88% of the Global X Blockchain ETF (NASDAQ:BKCH) and 4.23% of the State Street Galaxy Hedged Digital Asset Ecosystem ETF (NASDAQ:HECO).
Flows into or out of those funds can create additional buying or selling pressure in Applied Digital shares.
Price Action
Applied Digital shares were down 3.17% at $24.61 at the time of publication Wednesday, according to Benzinga Pro data.
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