When in doubt, borrow lines from others. 😀
The first “sub-header” I thought up – “Change the Channel?” Because it’s starting to look like AAPL is charting a course out of the decently-long-duration, pretty-big-range parallel/descending channel, via one of two ascending parallel channels. Long story short, the instantaneous read is suddenly looking pretty darn good for AAPL bulls. Even futures, though it’s still early, might give AAPL a bit of a lift heading into Monday.
Of course nothing is ever guaranteed and it’s always better to look at price action rather than strictly going by one’s gut feelings. So, what does today’s 3-chart check show us?
First, the 30-min chart (see note from the previous AAPLTalk post about timeframe limits):
– Profit-takers, bears, whoever they were, they certainly tried to bring AAPL down on Friday (amidst continued iPhone speculation and potential disappointment of China Mobile not launching the iPhone, well at least not right away). The gap up at close to 499 was faded as so often happens, and before first hour of trading was up, AAPL had been pressured down to just about 490.
– But after the touch at around 490, AAPL rebounded strongly for the rest of the day and closed within 50 cents of the open. Bears tried to steal some momentum in the last hour, but were largely unsuccessful.
– AAPL broke below both the lower gold channel trendline and the “upper third” base price channel trendline, but closed within both.
– MACD-h was modestly positive on this timeframe, with the Williams oscillator reflecting some potential bullish power into the close.
– So AAPL still continuing along those upper trendlines was constructive, particularly because either represent a way to breakout from the medium-term descending parallel channel. Until the golden channel is threatened, there really isn’t anything to get overly worried about for AAPL bulls.
Moving along to the hourly chart:
– A fairly similar story (for some reason the gold channel doesn’t look parallel).
– MACD-h crossed over from negative to positive on this timeframe.
– Note the rather sharp “V-bottom” type pattern in the Williams oscillator, suggesting a swift “rejection” of lower prices by AAPL. It’s unique in terms of the strong rebound from oversold levels.
– A volatility squeeze/”decision gate” is much more visible on this timeframe, and while AAPL had a full-on bull-and-bear tug-of-war in the final hour, AAPL remains above the hourly BB mid-channel (which is 497.17).
– Overall, the hourly read also looks positive for bulls.
Finally, wrapping up with the daily chart:
– If you refer back to that daily chart of the Sep. 4 market close where I circled two price timeframes, it’s much safer to say that there’s no meaningful similarity between the last 2-3 weeks of trading and the Jan 2013 price action that brought a huge gap down shortly thereafter.
– Yes, MACD-h is still negative. There’s apparently at least one school of thought that until the MACD-h goes positive, a (micro-ish) downtrend must continue to be assumed.
– At the risk of being “contrarian”, I instead choose to focus on the MACD-h’s positive slope, the continued intermediate uptrend and pure price action. The first two are self-explanatory. As for the third, just look at that strong hammer candle on Friday. There really isn’t another quite like it in the entire chart, which could be worth keeping an eye on. It’s especially interesting to see a hammer candle like this amidst continued consolidation, where AAPL wasn’t really near any danger zones. Yes, AAPL was in danger of dropping back into “lower gear” on the descending/parallel channel, but actually breaking below the channel would’ve required a close in the low 480s – and AAPL never even got close to that level. It’s also a “good” hammer candle, as opposed to the worrisome inverted hammers we’ve seen lately in this intermediate uptrend.
– I’d additionally point out the retest of the EMA-8 and SMA-20, which AAPL broke below and then convincingly reversed above in both cases.
– During this consolidation, the lower BB has made very steady strides, now being close to 470, and likely to be well into the 470s or even over 480 by this week Friday.
– The one potential danger sign my amateur eyes can see – and this is kind of a stretch – was, depending on the size of your tinfoil hat, a sharply upward sloping H&S-sorta looking pattern starting from around late July-early August (“left shoulder”). Is the price action from around late August or so to the present some bizarre type of mini-“right shoulder”? In my opinion, not really even a minor bearish concern unless AAPL breaks the 485 lower airspace support. Something that AAPL has yet to do.
All in all, a good day and a good week for AAPL (up 11 points overall), and we’re now less than two days before Apple officially kicks off its Fall Harvest – er, product year. (As nice as they are, the MacBook Airs – and really, even the most radically redesigned of Macs – wouldn’t count). I suspect the likely iPhone 5S and 5C introductions alongside iOS 7 will be mostly worth the wait for Apple’s intended target audience (read: predominantly iPhone 4 and 4S users, as well as new-to-Apple customers looking for a product like the iPhone 5C) as well as enthuasists such as myself.
As for those of us who (also) happen to be market participants, we have a shorter wait, and it should be a very interesting day for AAPL tomorrow. See you on the trading floor soon!