Chart of the Week: Apple

This week we are looking at Apple (APPL), but more from a bearish point of view.

If you take a look at the chart, you can see from the lows in January, the stock has made a nice series of higher highs and higher lows. If you connect all the times the stock has broken through the 20 day moving average – you can see about 4-5 times already in 2023 – it has tended to bounce back the following day. It has broken that 20 day moving average today, and you can see that we are near all-time highs.

The chart is strong, don’t get me wrong. But you can see that momentum is starting to slow down, money flow is starting to slow down as well. We are now on a sell signal on the MACD. We can see volume trends are starting to simmer down too. We had a lot more volume back in March and April but not so much now after earnings are gone.

I think we have to take this one day at a time here. If it does break down below this 20 day moving average for a second day, we’ll know that this pattern of gapping up and moving higher above the 20 day moving average following a drop below it – we’ll know that pattern is over.

Where can we see that stock fall? We can see first of all that targets include 165, which is around the 50 day moving average. Below there, 154, and 151 or so on the 200 day moving average. That’s of course getting ahead of ourselves.

There are some support levels below there. You can see right here at around 157 1/2, a good support level from the February high. Once we broke above there in March, we didn’t look back. We tried to break it at the end of March and didn’t break it down below that 157 area. That’ll give us some good support if it does break down.

As far as I’m concerned, Apple is a stock that is widely held. A lot of people own this name, big institutions are in Apple. It’s not going to drop too far. But certainly there is a pattern here and if it fails to follow through and get through that 20 day moving average, we do have some lower prices ahead.

So that’s Apple.

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