$AAPL Chart Checkup, 5/7/14: Marking Time Amidst Market Madness

Today was a wild day to trade the markets. Even if you weren’t dialed in the entire 6.5 hours. (And if you were, hats off to you…probably need a break after all of the craziness.)

Sure, the SPX and NASDAQ stabilized at the end of the day, but not before catching both bulls and bears off-guard.

Of course, we’re here to look at AAPL charts, aren’t we? 😛 Unfortunately, catching a hint of a clue is even tougher than usual right now. But you knew that already, so let’s just stick to basics (it’s all I can sort of do anyway 😀 ) and start with a look at the 5-minute timeframe.

5-min chart:


– AAPL actually started the day as one of the more uncommon advancing stocks…then it got reeled in by the downside momentum of the rest of the market.

– As noted by the yellow line, AAPL formed a micro head and shoulders pattern…but no follow-through below the indicated neckline. Huh. A small win for the bulls, for now.

– Undeterred bears, though, might be sounding the alarm for a potential micro bear flag. It wouldn’t exactly be a textbook formation to my untrained eyes, but we’ll see.

– I’ve drawn in a parallel channel just for my own tracking purposes. I’m not sure if there is a channel just yet, and I’m obviously much more familiar with the descending variety as you’ve seen over the past several months. Anyway, the lower trendline seems more important for now, which I’ll get to in a moment.

– AAPL “failed” the unreasonably tough Fibonacci uptrend strength test I mentioned yesterday. Though at 592.35 to close, plus with a intraday low just slightly below 588, AAPL has yet to break below certain levels of potential support, which the hourly chart will make a bit clearer.

Hourly chart:


– Yep, at this point looks like AAPL is still making higher lows. For now.

– Obviously, the read went from somewhat weak to somewhat weaker. Nothing definitive yet that I can see on this timeframe, but hey, you’re always free to comment below if you interpret things differently!

– Battle of the (Bollinger) Bands isn’t over yet. Since ex-div day is tomorrow, however, there would be a break of the non-div-adjusted BBs as well as a break below the 590 psychological level, “all things being equal”. Though…it’s hard to visualize that, since a bunch of market participants will simply react to the market’s “automatic” dividend adjustment tomorrow based solely on whatever the price action looks like (to them).

– I’m applying a new “Fibonacci test” to AAPL’s uptrend – still aggressive in my opinion, but considerably more reasonable than yesterday’s. Based on the 15-min chart I measured a sub-move from around 571 to the 604.41 peak. Interestingly, AAPL basically “bounced” off the 50% Fibonacci retrace level at just about 587.7 (while the 50% retrace apparently isn’t an “official” level, it’s said to be quasi-official given how often it’s relevant); and broke above the 38.2% retrace level (around 591.6) to end the trading day. (The 15-min chart illustrates this better; you can always check it out with your own charting software if you like)

Daily chart:


– Despite the recent market turmoil and AAPL’s own breakout failure, the bull flag’s still flying. Quite well, considering the “higher low” situation. AAPL approached, but didn’t break below, the EMA-8. I still think this particular upwave compares very favorably to the prior three, especially considering the velocity and relative magnitude. That can all change in a day, but for now, it is what it is.

– OK, maybe it’s not just my ego at this point – the price action keeps validating the mega-macro trendline lately. Sweet. 😀

The market will theoretically deduct $3.29 in share value from AAPL sometime around the start of trading tomorrow. Does that mean AAPL gets a technical “nudge” to the downside (given the psychological 590 level just below and market participants’ tendency to ignore the “mitigating circumstance” of dividend payments)? Or, if the market decides to whipsaw to the upside tomorrow, will AAPL still join in to some degree despite having a virtual 50-ish basis point penalty at the starting pistol?

Should be a “fun” Thursday – see you on the e-trading floor soon.

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