By Daniel
WallStreet.io contributor and analyst. Author of upcoming book on market volatility.
WallStreet.io contributor and analyst. Author of upcoming book on market volatility.
Did Today Offer Up a Discount on a Bowlful of AAPL?
AAPL looks like it is about to end the week on a strong down note, as Friday’s session is sending the stock deeper into the red and a loss for the week.
With a little more than an hour left in the session, AAPL is currently at $112.60, down 1.76%. That leaves the stock underperforming the broad market indices, with the Dow off by 0.58% and the benchmark S&P 500 index (SPX) down 0.46%.
AAPL does remain up for the year with a gain of 7.0% YTD. Meanwhile, the S&P 500 index is now up by 5.99% on the year.
After last week’s strong bullish performance, when the stock gained nearly 10% over the course of just 4 sessions, the current price action seems to be more of a consolidation than a sell-off.
The stock did just experience an intra-day probe below $112.50, which has shaped up as support for the current bull run. We’ll need to wait and see next week if that line holds up through the end of the month. If not, $110 would be the next target for the bears to take out.
AAPL’s 50-day moving average looks to end the day at $106.78, and could come into play as an additional level of support as it angles up closer to the current price action. The 200-day MA, at $102.01, is currently out of the immediate picture.
Short-term resistance right can be found at $116.13, and has served that role on a pair of occasions over the last 6 sessions.
December’s high of $120 remains not far off, and with the historically down month of September looking to end in the black, the seasonally favorable months of October and November could find AAPL breaking above that resistance level.
The MACD, however, is sending a signal of downward momentum, with four straight bearish bars in a row. Overall, however, the MACD remains crossed to the bulls, and until that signal switches back to the bears, those who entered the “crossover” trade are bound by the trade’s rules to sit tight for the moment.
Bottom Line: The same pair of signals that confirmed a bullish trend remain intact, with the aforementioned MACD signal being one, and the 50-day MA crossover above the 200-day MA being the second. So with that in mind, a second tranche might be bought, taking advantage of the price action to lower the trade’s average cost.