AAPLTalk, 07/29/13 Market Close and Micro Roadmap for the Week: Going Against the Trend

At least two very interesting things happened today in my humble opinion.  Here’s first and foremost to me:


Remember that green trendline, which has contained AAPL’s downtrend since forever, I mean Jan-Feb of this year?  Some measure it a bit differently, but to my eyes, AAPL FINALLY broke above it.  Not by more than a couple points, but it still did, and more importantly AAPL held above that invisible barrier pretty much all day, after early-in-the-morning prices of 440, then cresting 446 and not looking back.

The other very interesting thing was AAPL breaking above, and closing above the daily upper BB.

Why?  Well, when did that last happen?  Go load up your favorite chart and look back a few weeks if you like.  I’ll wait.

Yup…September 19, 2012.  Two days before the iPhone 5 launch.

Now might be a good time to quickly go over some of the “bad” aspects of today’s action.  Volume remains pitiful (by AAPL standards) at about 8.7M shares.  Some bearish divergences are apparently showing up on shorter timeframes like the hourly.  AAPL got rejected (mildly) at 450.  And AAPL is showing overbought on Fast Stochastics, along with that breaking the upper BB, which has had a history of forcefully “controlling” AAPL’s price action this (presently-concluded) downtrend.

On the other hand, MACD-h on the daily is just fine, there weren’t any troublesome gap ups today, and the combination of going back to overbought AND breaking the upper BB AND the last downtrend-top-based trendline for the first time in months is really only possible due to…well…bullish price action.

If I were to zoom in only on very recent price action, I’d see two signs of potential pullback/retrace.  And they’re definitely in play as caution signals.

Then again, I’m not sure the “perfect setup” exists, since some signal on some timeframe is bound to go against your trading thesis, bullish, bearish or neutral.  And price action seems more constructive than it’s been in months, even as it might look a bit overheated short-term.

Anyway, on the downside I’m personally looking at trendline/micro support around 446; and then 440ish/434ish support levels.  Above, there’s an action area around 450-470 where anything can happen.  Breaking it down, there’s the prior countertrend “lower highs” of 454ish and 457ish from June 4 and May 31 respectively; and then two big tests at the overall green line downtrend lower highs of 465ish (May 7-8) and 470 (March 25) before making a run at the SMA-200, which is currently a little below 480.

We’ll see where we’re at in the days ahead.  As always, who knows what’ll happen.  Interpret your own readings as best you can, and good luck.