$AAPL Chart Checkup, 5/12/14 Market Close: Sense of Direction?

“PROGRAMMING NOTE”: I’ve been updating the blog much more often than usual, so I’m probably due to ease off on the posting schedule, to more like 2-3 times a week. You can follow along on Twitter in case I have any “insights” on AAPL between blog updates.

A fifth red day could’ve been trouble for AAPL bulls. Today’s trading made that concern a non-issue. Let’s get right to the charts in search of fragments of clues.

5-min chart:

aapl-5min-051214close
– Was that a descending channel breakout, a “reversion” to the ascending parallel tracking channel, some of both, neither? Maybe the rest of the week will provide some “answers”.

– “AAPL-ception” continues. The inverted head-and-shoulders-esque formation from Friday (light blue) triggered with a gap up that was never revisited on Monday, resulting in…wait, is that ANOTHER inverted head and shoulders pattern (purple)? From May 7 or so, right shoulder forming in the first half of today? Too early to tell, but if it’s triggered, the measured move is around 8-9 points, which puts the bullish objective for that formation at around 600.

– Slight weakness to end the day, but still closed near the top of the day’s range.

Hourly chart:

aapl-hourly-051214close

– Hourly Bollinger Bands have yet to really resolve in either direction, though AAPL’s in much better relative position at the close (above mid-channel). Will this lack of “resolution” persist as long as AAPL trades between 580-ish to 600-ish?

– In the meantime, AAPL’s got some momentum back just as the SPX might make a move into the 1900s for the first time ever. And the bull flag, whether you measure from around 560 or 525ish, is certainly back in play as the MACD-h and oscillators turned very bullish short-term. Who knows about tomorrow, but there’s plenty of micro reference points to track as we wait to see if AAPL either moves back above one or more levels, or falls back towards prior support (or…doesn’t do much of anything? 😛 ).

Daily chart:

aapl-daily-051214close

– Nice green daily candle as MACD-h continues to move lower. We’ll see if a negative crossover can be “avoided” by the bulls, or whatever it’ll necessarily mean much if said crossover happens. Oscillators remain bullish (or overbought, depending on your point of view). I really don’t think you can identify a bear flag formation at this point (fourth day after AAPL failed to reach 605), though bears might have a case in a few more days if AAPL doesn’t make any progress from this point.

– I’m keeping August 2013 in the daily timeframe while we wait to see how AAPL continues from its bounce after 4 consecutive down days. In my humble opinion, there’s two points in time worth referring back to. In August, that rapidly descending channel where AAPL took a “breather” resulted in a very quick move upwards. In mid-December, AAPL had an uninspiring bounce after the same number of down days, and proceeded to consolidate in a generally controlled intermediate downtrend that severely tested AAPL bulls, as well as bears after Air Pocket II (late Jan-early Feb).

– Is there a pattern to watch for at this point, or will AAPL just chart a different path? Well, two consecutive green days would certainly help the bullish case, so long as the green day turns out “good enough” – whatever that means. “Just for fun”, I copied over a tracking downtrend line from the last consolidation period – given the fairly methodical price action in the past several months (air pockets excluded), AAPL never managed a channel breakout for more than (part of) a day, unless of course it powered on through to new trend/countertrend highs.

– While bulls would much prefer history not repeat itself just when management’s narrative is as positive as it’s seemed in some months…the kind of price action we’ve seen, frustrating though it may be, has led to a multi-month intermediate/macro uptrend in the grand scheme of things. If AAPL can’t retain the 600 level, some caution or at least patience may be in order for the bulls (which currently includes me) while the price action works itself out. Of course, it remains to be seen if AAPL will follow a familiar pattern, or just plain surprises everyone. 😀

Monday ended on a high note – literally, in the case of the S&P. Will tomorrow bring more market optimism? See you on the virtual trading floor Tuesday!

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