The 8.7% slide in the stock of Apple, Inc. (AAPL) stock since its September 1st high of $164.94 has gotten the market’s attention and spurred much debate. Some are wondering whether the stock has made an important top while others have raised their upside targets. Many of the opinions are based on fundamentals like phone orders or watch sales but what do the charts say?
The rally in early September peaked just above the quarterly pivot resistance at $163.50 and I have often explained how these important levels can be used to take profits. APPL turned up on the daily Viper Hot stock sell list on September 5th.
The 3rd quarter pivot stands at $146.91 and AAPL has not had a Friday close below its quarterly pivot since July of 2016. The preliminary 4th quarter pivot is currently at $152.44 so this will be the level to watch on a weekly closing basis in October.
The close last Friday at $151.89 was well below the prior week’s doji low at $157.91 (see arrow) so a weekly sell signal was generated. The weekly starc- band, which represents a low risk buy level, is at $146.91 with the current 3rd quarter low at $141.85.
The weekly relative performance measures the performance of Apple (AAPL) versus the Spyder Trust (SPY). The RS made a new high with prices which is a positive for the intermediate term. The RS is now declining and below its WMA as it has reached support at line b. Apple (AAPL) has also done worse than the PowerShares QQQ Trust (QQQ) which is only down 2.5% since September 1st.
The weekly on-balance-volume (OBV) also made a significant new high in September and is still well above its rising WMA. There is long term OBV support at line c.
The daily chart of Apple Inc. (AAPL) more clearly reveals the sharp slide in prices as it closed at the daily starc- band on Monday. This makes some consolidation or a rally likely as AAPL is in a high risk sell area. The declining 20 day EMA at $157.43 is now strong resistance. There is further support on the daily chart in the $145 area, line d.
The daily RS dropped below its WMA on 9/7 and is now well below its WMA and is overextended. The daily OBV topped out on September 12th when AAPL closed at $160.87 as both the RS and OBV were negative (line 1). The sharply declining WMA of the OBV is a sign that the OBV will take some time before it could bottom.
The strength of the next rally will help clarify the near term outlook as if a bounce fails in the $155 area it will likely set the stage for a drop below Monday’s lows. The $145-$147 area currently looks like a good target zone for a bottom but I would not want to see a weekly close under $140.
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