AAPLTalk, 10/15/13 Market Close: Invitation to Upside?

Last year’s more-modest-sounding media invite copy (“We’ve got a little more to show you”)…

…has given way to something…a bit less modest in today’s media invite to the previously-all-but-confirmed-by-Apple Oct. 22 media event.  (“We still have a lot to cover”).

Meanwhile, the legislative and executive branches of the US government…did their thing.

Mired in uncertainty, the S&P hesitated, off about 75 basis points, with the Nasdaq down about 40 basis points.

What about AAPL?  AAPL had itself a pretty decent day of relative strength/upside, all things considered, with a caveat or two.

As the markets hope that the proverbial can gets kicked a safe enough distance away for the markets to better evaluate earnings season with fewer distractions…and, dare AAPL bulls (including myself) hope, far enough away to let the new iPad/iPhone/potential China Mobile stories play out – let’s see what the charts say as of Tuesday’s close.

Hourly chart:


– It’s a day to take notice, at the very least.  AAPL broke out of the descending channel (as I measure it, at least, your conclusions may obviously differ) for the first time this “countertrend”.  The descending trendline was tested, and also “held” as a form of “support”, which I found interesting.

– MACD-h is holding steady while Williams oscillator is showing overbought/bullish signals on a level we haven’t seen since mid-August (I’m not counting the air pocket interval from September).

– As a bonus, AAPL hung out at and slightly above the psychological 500 level for a while. It didn’t close over 500, but AAPL is in a “you have to earn it” mode anyway, so in terms of this strange “show me” narrative it kinda fits.

– AAPL is looking “overbought” based on Williams/RSI, and the last two hourly candles weren’t the greatest.  But overall, a strong day when market weakness generally prevailed.  AAPL has passed the “third test” of bullishness so far – the other two being the breakout from the “older” descending channel downtrend line (bright green) and the wedge-type resolution to the upside (red/gold lines). Also of note, though it’s just hourly moving averages AAPL is solidly tracking the EMA-8.

– We’ll see how AAPL behaves in this 495-513 action zone over the next week or so, particularly as there’s now some hope of a partial government shutdown/debt ceiling resolution combined with a “pick one (or both) bullish setup”, potentially at a very opportune time.  I’m looking at 502ish, 507ish and 510ish as nearby upside levels, with the light blue descending channel line (it’ll be at about 497 end-of-week) as part of a 492-497 micro action zone below (which was primarily resistance recently).  Staying within the light blue descending channel wouldn’t be the worst thing in the world, but as the daily chart illustrates, AAPL bulls would much prefer that the momentum continue. Though it wouldn’t surprise me if the iPad event anticipation and maybe even the post-event ‘disappointment’ from some corners (it’s on the way, just you watch) ‘restrain’ AAPL somewhat.

Daily chart:


– The disconnected inverted head and shoulders pattern continues to set up very nicely, with AAPL making a significant micro higher high vs. the prior high/beginning of the potential inverted right shoulder.

– If you’d prefer to ignore the “air pocket” (I’m not, but that’s just me), the first signs of a bull flag breakout are definitely there.

– MACD-h looking positive, and also “gradual” (more sustainable?), although the Williams/RSI readings indicate “overbought” in the abstract.

– While AAPL is behaving quite differently as far as micro higher highs are concerned, I still thought it worth pointing out the price action around the completion of the potential inverted left shoulder (circled), which actually had a “better” daily candle but then followed up with a significant drop of about a dozen points from open to close.  The daily candle today does look a bit inverted hammer-ish.  On the other hand, Sep. 9 also was a gap-up day, while today saw AAPL fill the gap, but just a bit, still ending the day higher.  In my humble opinion, bulls have more reason for optimism if tomorrow’s price action is at least constructive, vs. the fairly strong trendline rejection seen on Sep. 10.

The Apple story (the completed iOS lineup with a few other nice if shockingly “niche” products) and the AAPL story looking up? At the same time? Might AAPL bulls finally catch a break?

If I had to go out on a limb and make a prediction, I’d say…just maybe. 😀

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