$AAPL Chart Checkup, Weekend Edition (5/9/14 Mkt Close) – All Kinds of Mixed Signals

Apple v. Samsung II news – didn’t seem to hurt AAPL’s uptrend.

AAPL going maybe “too far, too fast” considering the record recent upwave of 80 points vs. more like 60 in prior months – maybe that did.

Broader market whipsaws – seemed to blunt further AAPL upside.

Ex-div day – looked to be the nudge bears needed to push AAPL below 590.

Those rumors of Apple in talks with Beats Electronics for a $3.2B acquisition – hard to tell if there was any effect.

And that’s before trying to figure out the technicals! 😀

Tricky to say the least. Well, let’s look at the charts anyway and see what incomplete clues for Monday may be buried within.

Starting a bit out of order with the 15-min chart:


– Talk about a wild week. Some group of people “sold the open” (or there initially wasn’t buying interest, whatever), but 590 wouldn’t budge. After that, a model intraday bull flag bringing AAPL to 600+ and a 600+ close for the first time since late 2012. Apple had a little extra momentum through 604, then “gravity” took over and one bear-flag-esque formation later, AAPL found itself forming a maybe head-and-shoulders and definitively breaking below 590 for the remainder of the week.

However, any new bear flag formation or head-and-shoulders downside follow-through got stopped in its tracks by support slightly above 580. Which was a bit curious (if somewhat “explainable” by OpEx Friday, who knows) because 580-ish hadn’t acted as a reference level at all since earnings. AAPL ultimately closed the day with relatively minor losses (though still underperforming the markets), and about 15 points (non-div-adjusted) off the uptrend closing high.

– The current read on the 15-min, oddly enough, looks countertrend-type bullish based on the few indicators and trending “techniques” that I use. Yes, there actually was a price volatility resolution to the upside based on Bollinger Bands near the end of the day (true, you’d expect that from a quick move on a short-timeframe chart). MACD-h and the oscillators also turned positive/bullish to end the day (subject to the same high-price-sensitivity-due-to-micro-timeframe caveats). In turns of formations, AAPL looked to be forming an intraday island bottom, which could be bullish depending on confirmation (gap up of some kind and continued strength on Monday).

– Also of potential interest is AAPL’s price behavior in the green “tracking channel” I’m following for now. It might be a “bullish” descending channel – albeit one which needs to broken out of in fairly short order due to its downward velocity – if AAPL can break above the upper descending “trendline” with some authority in the next few sessions.  Conversely, if AAPL can’t get close or bounces off the top trendline on a breakout failure, that could be a key tactical victory for the bears.

Next, the 5-min chart:


– It might not be a “classic” exemplar, but it sure looks like the necessary elements exist for an inverted head and shoulders, considering the multi-day downtrend.

– “Validation” of the potential formation requires a break of the light blue trendline, along with, ideally, a measured move of at least 5 points from the breakout attempt.

– Let’s see whether AAPL can, at least for the time being, repudiate the bear flag theory that many AAPL skeptics and shorts surely have. It looks different compared to recent micro price action…but it has to end up being different.

Hourly chart:


– AAPL actually did reclaim the 61.8% Fibonacci retrace level of the move from 571-ish to 604.41 today…but for the time being, I’ll be focusing on the upwave from 560.73 since it covers all (recorded) price action since the earnings report. Given the corresponding Fib levels and prior points of reference, AAPL “should” hold between 575-577 or the bear case for revisiting the 560s-570s or even the post-earnings gap gets stronger.

– The two consecutive green candles to end trading do seem stronger than Wednesday’s, and particularly Thursday’s. Of course, whether they were indicative depends on Monday.

– To show a possible change of composure on this timeframe, AAPL needs to trade above the Bollinger Bands mid-channel (SMA-20), which it hasn’t been able to do since mid-Tuesday.

Daily chart:


– A four-day down move, with the upper-level bull flag theory apparently out of play on this timeframe.

– We’ve had a fair number of 3-day and 4-day down moves since last August – the early August move at the far left would be the ideal scenario. The other mini-downwaves, with the exception of “Air Pocket II” from Jan. 30-Feb. 1, didn’t result in uptrend or countertrend upside.

– What does it mean? Don’t ask me. 😛 It’s even possible AAPL could, for whatever reason, close Monday with a fifth consecutive down day. Which, by the way, would really be something to take notice of, since it hasn’t occurred since around mid-June of last year (just days before the double bottom formation completed).

– Now that I think about it, Monday could be an even more important inflection point for AAPL than I first thought. Good thing, then, that AAPL ended the week with a decent pair of red candles – a topping candle/inverted hammer-type candle on Thursday (take your pick), and a small-range-yet-decent-volume hammer candle on Friday. It’s either “topping candle in an uptrend didn’t result in meaningful downside follow-through” or “downside momentum fading, Friday’s hammer possible setup for Monday reversal”. There are far worse reads in a multi-day downtrend.

– EMA-21 (non-div-adjusted), the next lowest moving average I track, will probably be around 575 before too long. Bulls would certainly like that level to hold, or better yet, not be revisited until it’s considerably higher. AAPL avoided testing the EMA-13 by about 25 cents – you’ll see that moving average in future charts as I try it out.

Wrapping up with the weekly chart:


Hmm. Looks kinda close to a shooting star.

– For whatever reason, AAPL still lacks enough momentum to hold above the 5-year macro trendline. And while a single candle doesn’t mean “doom”, a topping tail candle like that in the current chart context definitely warrants caution.

Lots to think about for next week – and that’s just AAPL. See you on the virtual trading floor Monday.

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