AAPLTalk Weekend, 3/21/14 Market Close: It’s Now or…Maybe Later

As Apple’s fiscal Q2 draws to a close, are we also finally due for some “closure” on this indecisive…AAPL…rangebound…downtrend…trading…thingy? Let’s see if the charts hold any clues.

Daily chart:

aapl-daily-032214close

– Things have looked surprisingly symmetrical over the past few months if you look at the rectangle/square areas.  But it seems like this latest…whatever you want to call it price action has taken forever.  Over three months, considerably longer than the last descending channel (with sudden selloff and recovery in the middle) from around August-October last year.

– Speaking of symmetry, the December 2013 – present set of candles looks kind of like an inverted head and shoulders, doesn’t it? Could be fairly potent if the pattern triggers – just look at last October. Note also those hammer candles I’ve marked with the arrows. The current hammer candle looks especially potent for a hammer candle – a classic exemplar, if you will, not too far removed from the potentially-super-bullish dragonfly doji.

– Other positives while AAPL trades within a considerable volatility compression phase (nothing definitive, but positive nonetheless):  MACD-h has yet to go negative; the purple trendline is still holding (translation: continued higher lows); Williams oscillator heading towards overbought, but still with some room to go; AAPL’s trading over the SMA-20 and over the SMA-50 for the first time in several days.

– Negatives? Well, it’s been sizzle without steak. Tea kettle’s on the simmer, but there’s no boiling, no whistling steam.  AAPL has more to prove to the upside, in my non-expert opinion; just looking at trendlines, AAPL has yet to break the blue downtrend/reference line. Then there’s a green one, and an orange one, and ultimately the upper gold one for AAPL to “prove” that the price action was undergoing a rather wild consolidation phase as seen in Aug-Oct.  There’s also that SMA-100 that AAPL hasn’t been able to hold above just yet.

– If AAPL can’t quickly capitalize on the hammer candle and somewhat favorable position in the volatility “decision gate”, it could easily lose the “bullish narrative” (and buyers), and probably fall below all of the moving averages I track except for the SMA-200. Quite easy to do, since so many moving averages are tightly grouped. The purple trendline (which will be at around 525 on Monday), has proven quite instructive since last April in my humble opinion:

aapl-daily-032214close-purpletrendline

And said purple trendline would need to hold up against the inevitable bear raid if AAPL failed to resolve this wedge-type price action to the upside. Not far below would be support in the 510s.

That being said, when was the last time you saw something like this from AAPL at the end of trading on a Friday?!

30-minute chart:

aapl-30min-032214close

– That’s kind of a powerful buying wave.  Indeed, daily volume was “unusually high” at 12M+ shares vs. the <10M we’ve seen lately. Check your favorite hourly chart (I did) and try to find the last time AAPL put in a final Friday hourly candle like this Friday’s. I suspect you won’t find one in several months, not since 2014 at least.

– Interestingly, AAPL did attempt a breakout at the beginning of the day, but failed – AAPL recaptured much of that green ground when it mattered the most.

– The 30-minute chart shows AAPL revving up as the clock ran out, but it also seems to show at least two head and shoulders patterns (around Mar. 5-20, Mar. 17-20). Can AAPL “escape them”? As the wedge narrows, we’re right back to whether it’s the blue line or purple line that AAPL breaks first.

Finally, let’s zoom out a bit to look at the intermediate uptrend in progress.

Weekly chart:

aapl-weekly-032214close

– If you were lucky enough to be long since the 380s…you’re probably wondering what traders such as myself are making such a huge fuss about.

– Whether you call it an intermediate uptrend or a countertrend from 700 or so, AAPL has been doing more than fine based on the Fibonacci metrics.  As of now, AAPL is right around the 23.8% retrace level, and from the 575 high, it only briefly broke below the 38.2% retrace level – nowhere close to the “uptrend is still intact” 61.8% retrace level.

– Not too shabby price action, considering the MACD-h has been in the negative for a couple of months. Of course, the bearish read on that is…that MACD-h has been in the negative for a couple of months. And to be as objective as possible, you could make an argument for a bear flag formation based on the last five weekly candles.

Well, if nothing else, bulls and bears alike seem to agree that a move in a direction is due before too much longer. The upcoming HSBC China Flash PMI reading and Eurozone/EU PMI readings should influence some directional behavior for both AAPL and the broader markets. Best of luck to all next week.

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