AppLovin Corporation (NASDAQ:APP) is climbing higher on Tuesday. The bounce comes after a sell-off yesterday following negative comments from Bank of America.

As you can see on the chart, the move lower yesterday ended when it reached support around the $442 level. But this morning, the stock is bouncing back up. This is why AppLovin is the Stock of the Day.

Support is a price at which there is a large amount of demand for a stock. There are so many buyers that downtrends end when they reach support.

$442 was support in April. Then it was support in June.

There can be support at levels that had been support before. This is a result of investor psychology.

Some of the people who sold around $442 in April regretted it when a rally followed.  Many of them made the decision to buy their shares back if they could eventually repurchase them at their selling price.

When AppLovin dropped back to this level in June, they placed buy orders. This created support at the price again.

If a large number of people try to buy their shares back at the sale price, it could result in support forming at that level again. This could put a floor under the price.

If the stock moves lower, it may end around $372.50. As you can see on the chart, this price was support in February and April.

APP Stock Price Activity: AppLovin shares were up 2.20% at $452.61 at the time of publication on Tuesday, according to Benzinga Pro data.

Photo: Shutterstock