Turns out AAPL did have a generally nice, green, holiday-shortened trading week after all.
But not without some potential caution signs and a couple opportunities to
– “take stock” *ahem* of how far AAPL has come since earnings, plus
– assess the short-term technical situation/one’s individual risk tolerance (if a trader) with those Two Trials of Sentiment™ (WWDC next Monday, around 1-3PM Eastern time, and the share split record date of June 6, with it actually being priced in on June 9) very close by.
My completely non-actionable, “strictly-just-for-fun”, could-be-hilariously-wrong prediction? Longer-term, I’m an Apple/AAPL optimist, but for now, I’m thinking there’s a higher chance of retrace before continued rally, even if the actual retrace interval turns out to be relatively brief (as in a few weeks vs. months). It’d be constructive for AAPL to “cool off” in my humble opinion, though the uncertainty of WWDC/share split over the next week or so would still be there in some form regardless.
Then again, Wall Street might really like something Apple announces at WWDC, and we’re off to the races (again). Who knows.
All that said, let’s have a quick look at the charts.
(Click for full resolution charts)
– Weakening momentum in the short-term. Tuesday started off with sustained power even after the 3-day weekend, quick consolidation, small price gap and clean breakout on May 29th, another small price gap and big run-up to 644 and change on Friday in early trading…
– …then it looked like AAPL, at the very least, was finally ready to “take a breather”, as it were. Profit taking, running out of buyers, bears finally got some traction? Whatever the case, the price action shows some definite weakness relative to the recent past.
– Looks like a head and shoulders formation on Friday, though not a trigger based on what I think is the “best fit” neckline. It remains to be seen if this theory is given more weight by various market participants because of AAPL’s rejection at the old 644.00 resistance from mid-April 2012 (though AAPL did trade at 644.17 yesterday), a general feeling that AAPL’s peaked/moved too far too fast, something along those lines (or not). Anyway, call it a measured move of 11-12 points from the head and shoulders pattern trigger, should there be one. If it happened early on Monday, that’d be around 620.
– Alternate bearish read is micro-timeframe bear flag from 644, which in the event of a trigger suggests a measured move of 15-16 points from the point of breakdown by my humble read.
– AAPL acting noticeably weaker on this micro-ish timeframe based on testing SMA-20 (midchannel).
– Relatively sharp price spike and pull-in on Friday relative to recent action. What it means, who knows – my Capt. Obvious read is higher volatility. 😀
– Now we have a confluence of two micro-bearish reads (see 5-min chart “notes” above) with MACD-h and oscillators all trending lower (MACD-h negative and heading lower in last 3 hours of trading). 627-28ish/624ish below might be points of reference, but considering AAPL’s 16-point range day on Friday, who knows how “in play” these fairly-close-by levels will really be.
– Read’s looking net bearish on this timeframe. We’ll see how it plays out on Monday.
– From this timeframe
it looks more like the beginning of breaktime than breakdown, there’s no obvious “trouble signs”. Not a particularly bearish red candle as they go, with AAPL now 30 cents or so below the top Bollinger Band. Bollinger Bands still implying range expansion.
– MACD-h tapering off, but it hasn’t been “as instructive” considering the massive move off 511. Personally, I’ll be paying more attention in the event it looks like it might cross over into negative territory. Oscillators still bullish/overbought, and AAPL is still over all moving averages (EMA-8 = 620.73 non-div-adjusted)
– It’s just one exceedingly humble home gamer’s opinion, but AAPL, by my back-of-the-napkin calculations, has basically had two recent rallies in one. By which I mean AAPL in recent months saw multi-week consolidations and 60-ish point moves up, while AAPL has just seen a move of 133 points (measuring intraday lows and highs) in 6 weeks without much of a break in the action. A very rapid ascent, especially by recent AAPL standards. There are worse times for AAPL to rest and retrace…although with the higher elevation, WWDC and the share split might make navigation that much trickier for traders of any direction, including no direction.
– SMA-20 currently at 603.78, and due to cross over the mega-macro trendline (for now anyway) on Monday.
Wrapping up with the weekly chart:
– Still quite strong, but the end-of week resistance is readily apparent in the newest weekly candle. Note that the current upwave is outpacing the velocity even from the 388-ish double bottom.
– On this longer-view timeframe, perhaps the more important storyline is AAPL net reclaiming the macro trendline in the upcoming few months (if you’re a bull, that is).
Should be a fun Monday, especially if you’ll be tuning into the WWDC live stream. I might do a little live-tweeting as I follow along. Have a good weekend.