AAPL Chart Checkup, Weekend Edition (5/2/14 Mkt Close) – Constructive Week, But the Jury’s Still Out on 600+

A great week overall, though the past four days (and really, the last three major moves) could make AAPL watchers wonder whether this so-far-constructive bull flag formation won’t give way to a few weeks – or more – of rangebound, indecisive action.

There’s also the Apple v. Samsung II wildcard, in that Apple “won”, but kinda “lost”, and the market has yet to weigh in on whether the verdict “means anything” in market capitalization terms.

Let’s see if Friday’s action gave any hints of clues heading into Monday trading.

5-min chart:

aapl-5min-050214close

– Don’t necessarily pay a lot of attention to the parallel green lines. Now if there’s a breakout and AAPL can continue to hover above, say 595, then maybe this was a micro descending channel after all. At this point it seems too early to tell.

– Me personally, I find this chart most useful for reference levels (yours may vary, of course). To the upside, 594-595ish, then around 598, then another attempt to break 600 seem like pretty sensible short-term bullish objectives.

– There’s a bit of support below in the 589-591ish band, then 586-ish, then 582-ish.

Hourly chart:

aapl-hourly-050214close

– AAPL has yet to make a decisive move on this timeframe, though it hasn’t been able to hold above the SMA-20 midchannel (midpoint of the Bollinger Bands) since Thursday noon Eastern time. On that basis, AAPL’s a little “weak”.

– On the other hand, MACD-h has been steadily trending upward (though still not positive), and an upper-level bull flag theory (measuring from the low 570s) still looks viable. Oscillators have “worked off” their overbought readings and at Friday close were heading to solidly bullish territory once again.

– Based on that very limited set of indicators, AAPL does seem to net out slightly bearish, but there’s hardly any confirmation yet.

Daily chart:

aapl-daily-050214close

– Bearish interpretation – failure to reclaim mega-macro trendline; rejected short of 600; MACD-h trailing off; oscillators showing overbought.

– But a net bullish read seems more plausible. So far, AAPL is flagging very nicely despite a record move compared to recent months. The set of candles compares quite favorably to the previous three major moves, four days after the peak, at least on a high-price-to-last-price basis. AAPL even has some “breathing room” based on a Fibonacci measurement of the sub-move from around 572.50 (the 61.8% retrace level is slightly under 583).

– I don’t see any problem with the oscillators showing bullish after four months of a mostly controlled descending channel…after all, that’s the longest such period since AAPL bounced from around 389 at the end of last June.

– The Bollinger Bands have had a chance to catch up, with the EMA-8 at 578 and rising (albeit more slowly than before). And so far, the potential shooting star candle from Wednesday hasn’t amounted to anything bearish.

– This is not to suggest that “upside is guaranteed this week” or anything like that. AAPL has levels to hold above, and 600 to break to add any upside. Retracement might still happen, and some downside might at least be seen as healthy, even for the bull case. We’ll see.

Finishing up with the weekly chart:

aapl-weekly-050214close

– Couldn’t hold over the mega-macro trendline, but hardly a big concern considering where AAPL was two weekly candles ago.

– Not too shabby for a “Week 3 Rally” candle, considering the adding to the prior week’s gains and MACD-h going positive for the first time since January 17, 2014.

– The weekly chart really hasn’t looked too scary for bulls at any point this uptrend/countertrend (well, except for that 50-point freefall at the end of January which saw a slight, but one-time, break of the 38.2% Fibonacci retrace level). Sure, the chart’s “suggesting” that bulls shouldn’t expect rocket-launch candles like April 25 anytime soon, but hey, stair-steps or escalators always make for more sustainable price action than elevators.

So far, so good for the bulls. But will the “disappointing” Apple v. Samsung II verdict weigh? See you on the virtual trading floor soon!

 

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