During Wednesday's "Mad Money" program Jim Cramer told viewers about a gaming stock he really likes. He said investors looking for a fast-growing game developer should take a look at the recently public AppLovin Corp. (APP) . Indeed, this name may be the greatest little stock you've never heard of, he said.
AppLovin came public earlier this year to little fanfare. The company began as a provider of software development tools but soon evolved into in-house game development and now boasts a portfolio of more than 200 titles, most of them mobile games you can play on the go.
Cramer said AppLovin's game portfolio would be impressive on its own, but the company also has a trove of valuable data it compiles from its customers, which helped it achieve a 73% compound annual growth rate from 2018 to 2020. AppLovin forecasts 80% growth in 2021.
That's why Cramer said AppLovin is a great business that's worth buying.
Let's check on the charts and technical indicators for a couple minutes.
In this daily Japanese candlestick chart of APP, below, we can see that prices declined slightly from the start of trading in April but found buyers in May. Notice the shift from red (bearish) candles to white (bullish) candles. We only had enough price data to run a short 20-day moving average line, but still the line has a positive slope and prices tested the line the other day. The On-Balance-Volume (OBV) line shows a rise from the middle of May and the 12-day price momentum study does not show a worrisome slowing in the pace of the advance.
In this daily Point and Figure chart of APP, below, we see an uptrend, but the software also is showing us a potential downside price target in the $66 area.
In this weekly Point and Figure chart of APP, below, the software is not showing us a downside target nor an upside price target. A weekly trade at $89 will refresh the uptrend.
Bottom line strategy: I may have to ask my 14-year-old grandson about this company, but in the meantime the charts are positive and I would recommend going long. Risk a close below $75 for now.