Sunday Playbook, Week of 8/5/13: Chart Survey – Are AAPL Bulls There Yet?

Hasn’t really been much to say this past week – it was a great one for Apple!  The charts do most of the talking here.  (Three charts in one post, so to save space they’re not on the front page.)

The hourly chart shows AAPL’s progress in the kinda-sorta parallel channel, and AAPL actually revving up and seemingly gaining momentum (light green line) on Friday.  Notice AAPL powering over both the purple and orange downtrend lines (the orange line being the “last” hurdle) and not really looking back.  AAPL also showed considerable strength over 450 (light blue line).


Daily chart (the green parallel lines have since been mildly adjusted) also shows AAPL’s continued momentum.  Because of fewer candles it might also show that maybe-accelerated trendline (lighter green line) a bit better.  Volume better than Thursday, constructive price action, and AAPL looks ready to challenge the 465-ish/470/SMA-200 (low-mid 470s depending on dividend adjusting) levels.


Zooming out some more, the weekly chart also looks positive.  The circled oscillator readings are just my tracking of a maybe-pattern repeating itself, at least as far as AAPL holding the line on oversold conditions when it had to.  Which proved tricky for AAPL as the massive accelerated trend to 705 reversed in an ugly way, earnings and revenue growth slowed, sentiment turned mega-bearish, and all the rest.  Considering the unbelievably negative readings on the MACD-h, is it time for AAPL to “balance the scales” just a bit on the intermediate uptrend front?


As you’re well aware by now I make no claim of expertise, and am nothing close to an investment newsletter.  That said I’d be even less of a trader/investor than I already am without looking at the potential warning signs.  Since I tend to focus on the daily chart, that’s where the “red flags” seem most obvious to me.  Clearly AAPL’s bullish action as seen by the light green potential accelerated trendline and closing over the upper daily BB gives the impression of AAPL getting a more than a little overheated, as does AAPL still floating over the EMA-8.  It’s hard to say how AAPL will react in that big action area it’s already in, 460-470ish.  465-ish and 470-ish were key points in that major downtrend line AAPL finally escaped.  Generally speaking, the higher a stock goes without “rest”, the “more likely” a retrace is impending.

And yet, it’s safe to say the 705 >> 380ish downtrend was nothing sort of epic in all the wrong ways for AAPL bulls.  (AAPL bears, another story obviously.)  Does Newton’s Law of equal and opposite reaction apply when a stock, after many months, breaks free of a downtrend?

My answer, of course, is I have no answer.  I’m feeling net bullish, but you may feel differently, or see any other number of valid trendlines or patterns or indicators I don’t, etc.

But for now?  Congrats to the AAPL longs, and best of luck to all (bull, bear or otherwise) as we head into the first week of SPX 1700+.  If there’s one thing I know, it’s that this summer of trading has been anything but boring, and I don’t see that changing anytime soon particularly with the higher elevation.

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