The Journey of Appen’s Stock Price and Business Operations Through Recent Years, page-431

Steve Collette, Collette Capital
On August 21, 2024
Breaking Out: This one-time ASX tech beast looks ripe for a reawakening

Breaking Out is our new, technical analysis-fuelled, short ‘n’ sharp info bite, which each week narrows in on a rising ASX stock. One that’s specifically caught the expert eye of * contributor Steve Collette – head of Collette Capital in Melbourne.

The beast unleashed…

Whilst logistics software monster WiseTech Global (ASX:WTC) was stacking on five times from 2020 lows, Appen (ASX:APX) – a data services provider and AI systems enabler – was stuck in reverse, pulling back from an adjusted high of $38 to as little as 26c during 2024.

Fast forward to July 30 this year and Appen’s most recent quarterly has reversed the narrative.

The stock put on 24c that very day to a close of 67c and has not looked back.

That close put it above the simple 200 day moving average (in red, see chart below), which it has not broken since.

Yet more impressive, current levels of 120c at the time of writing would have Appen on target for a close above the 107.5c high close from March 2024, and thus would complete the base dating back to mid-2023.

This then would be a breakout in earnest and usher in the possibility of far higher targets.

Of which there are plenty.

Appen probably doesn’t have to do much more than feign the perception of period-on-period growth to keep the bulls in charge in the near term, given the degree to which it has already been beaten down, combined with traders’ desire to find even somewhat relevant, liquid tech plays on the ASX.

If to buy, one should expect plenty of action and a few white knuckles along the way, as 30-day historical volatility currently sits at an eye-watering ~175.

Yet for those with the appetite (and a wide-trailing stop), a close above 107.5c will have the bulls eyeing off levels closer to the (adjusted) gap fill just in excess of 200c.