Shares in Appen Ltd (ASX: APX) are surging higher again today and are currently trading 3% in the green.
The jump marks an approximate 8% gain Appen shareholders have enjoyed over the past two days of trading, despite no market-sensitive news from the company.
ASX tech shares have begun to stage a short-term rally, as confidence reappears in the sector once again after leaving the party in early 2022.
At the time of writing, the Appen share price is $7.245, up 3.21% on the day.
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Why is the Appen share price strengthening?
Shares in Appen are rising today amid sector strengths in ASX tech names on Thursday. The S&P/ASX All Technology Index (ASX: XTX) is 3.73% in the green after faltering for much of 2022.
But as confirmation on the trajectory of interest rates was provided by US Federal Reserve Chair Jerome Powell last night, ASX tech shares are alive once more. The Federal Reserve lifted interest rates by 25 basis points, the first rise since 2018.
It appears the market has digested the news and is happy with the clarity, especially on themes like inflation.
As a result, global tech baskets are starting to resurface from their time in the red, although it's not entirely clear just how long the joy will last.
Elsewhere, the tech-biased Nasdaq Composite Index (NASDAQ: .IXIC) spiked almost 4% overnight. Additionally, tech exchange-traded funds (ETFs) have also popped, with the BetaShares S&P/ASX Australian Technology ETF (ASX: ATEC) up 4% today.
Keep in mind an increase in base rates could potentially be a negative to the valuations of tech shares, especially if the hikes spill over into the bond markets.
Nevertheless, moves of the wider sector are important for Appen, seeing as its share price closely tracks the index, as shown over the past three months below.
Not only that, Appen's executives are buying up more of the company's shares – a bullish signal in the eyes of many.
The premise is that, if a company's c-suite starts buying shares, they are laying down a big vote of confidence in the future prospects of operations.
Appen's chair, Richard Freudenstein, and CEO Mark Brayan each loaded up on shares in the company's register recently. The former added another 14,795 shares whereas the company's chief acquired 106,666 shares directly.
Despite the frenzy from investors these past two days, analysts at Macquarie are still bearish on the Appen share price and urge its clients to sell after valuing the company at just $5.70 per share.
At the time of writing this suggests a downside potential of 21%.
Appen share price snapshot
In the last 12 months, the Appen share price has fallen around 60%. It is also down 35% this year to date.
Over the past month, its shares are down by almost 15%.
