Duolingo’s stock jumped by 8.53%, closing at $347.27. This marks a 35% recovery since September. The main reason for this surge is Duolingo’s “AI-first” strategy, which positions the company as a leader in AI capabilities and productivity. Since its IPO in July 2021, DUOL has consistently moved within a rising parallel channel. The stock recently broke out from a consolidation area, reaching the upper boundary of this channel, which now acts as a temporary resistance level. Another resistance level to watch is at $363.19. Duolingo’s strong fundamentals, including a 41% growth in revenue year-over-year and 70% gross margins in Q2, bolster this technical setup. For the stock to keep rising, it must break above $363.19, which could pave the way for a target of $425.99, offering an upside of over 20%. In other market news, the DOW Jones Industrial Average hit one-week lows amid concerns of a government shutdown, gold prices fell to $3,950, and the Canadian dollar weakened as the US dollar gained strength. Other topics include XRP’s potential losses despite Ripple’s expansion into the Middle East, US tariffs, and the rising demand for privacy protocols in cryptocurrencies like Zcash. Insights into leading brokers in 2025 and various market updates are also highlighted. With Duolingo’s stock pushing against the top of its long-term channel at $347.27, we’re at a crucial turning point. This rise is driven by a compelling AI narrative, reminiscent of the trends that lifted tech stocks in 2023. Given this, traders should consider preparing for a significant move in the coming weeks. For those optimistic about continued momentum, purchasing call options with a strike price above the next resistance at $363.19 is a wise choice. There’s growing interest in the November 2025 $370 and $375 calls, indicating that many investors are betting on a breakout towards the $425 target. A bull call spread could also be a strategic way to reduce entry costs while defining risk. However, it’s also possible that the stock could fail at this channel top, especially with broader market anxieties around a potential government shutdown. This situation reminds us of the volatility spikes seen during the 2018-2019 shutdown, which shook equity markets. A bear call spread, such as selling the $365 call and buying the $375 call, could be profitable if the stock doesn’t break higher. The upcoming earnings report, expected in early November, is a key factor that will clarify this situation. The implied volatility on DUOL options has risen to over 45%, indicating anticipation of a significant price movement. A long straddle, which involves buying both a call and a put, is a strategy worth considering to capitalize on big moves after earnings. Ultimately, how the market reacts at the $363.19 resistance will shape the next major trend. The current 41% year-over-year revenue growth provides solid support for a bullish outlook. We need to observe whether this strong fundamental narrative can drive the stock past this important resistance point.

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