Yet another impressive day of market outperformance by AAPL, this time with what sure seems like a breakout from an ascending parallel price channel to me.
Aside from that little inverted hammer to end the day (and you’ll notice that other one from July 31) and the MACD-h hourly cooling off in positive territory, the story is continued strength. Notice the volatility squeeze implied by the BBs resolving to the upside in impressive fashion around August 2. AAPL seems pretty comfortable riding along the upper hourly BB lately with no signs of being rejected in those upper bounds. Sure, AAPL’s no longer at the top of the hourly upper BB, but it’s still close to it, and if anything it looks like a nice micro bull flag formation might be forming.
Zooming out to the AAPL daily chart:
More of the same. No real signs of weakness (AAPL challenged 470 and broke above it more than once during the day), 465 was basically treated like no resistance at all, and the accelerated trendline is still very much holding. While AAPL closed below 470 to end the day, it still looks much more like it’s “on the way up” than back in late March (see the not-so-nice green candle presaging the sharp fall to 385). AAPL looks like it’s “riding” the upper BB rather than defying gravity, and the former seems just a bit more sustainable. That stubborn lower BB isn’t really hooking upward at the moment, but what can you do. AAPL does still look like it’s in range expansion after all.
Not really much else to add, aside from the standard notes of caution, which necessarily get a bit louder the longer an uptrend’s been in play, and the higher up a trader participates in a rally (story of my trading life). The elevation is getting “high” in comparison to 388. AAPL’s been “rocketing” upward since shortly after earnings (though again, at a less frenetic pace than other higher-beta names). AAPL has been handling every action area it’s been in (since earnings, anyway), with aplomb, but between here, 470, the twin SMA-200s (fortunately, they’re fairly close together whether you dividend-adjust or not), 480, and 485 as the last “barrier” to a fresh attempt to fill the January 2013 earnings gap, challenges remain. Will AAPL have a chance to rest or will the music just stop at some point?
I remain bullish on AAPL, perhaps foolishly in the face of these concerns, in case you were interested. But aside from that, these AAPLTalk posts simply try to objectively measure the action from one or two timeframes, regardless of how I might be trading – a goal I hope won’t change. Even though the measurements are with crayons and other elementary school tools, as I’m hardly well-versed in technicals. I do hope to graduate from kindergarten to first-grade levels of technical understanding somewhere down the road.
What I can say with relative confidence, having traded for some years now: Long, short, hedged, uninvolved, you know what’s best for you. Follow your own plans, and keep on taking accountability as I’m sure you always have. Best of luck on Tuesday.