AAPL Chart “Week in Review” (6/27/14 Market Close): Breakout Attempt #1

A three-day bounce with increasing momentum (albeit very light volume, and hardly momo-stock-like), leading to an up week at the close.

Apple’s fiscal Q3 ends today (assuming everything’s just set to “Cupertino time”) and the charts might be even less “helpful” (a common phenomenon) as we get closer to that little quarterly event also known as the Apple Inc. earnings announcement. That said, let’s have a look at “the week that was” and see if there’s potential hints of clues in the charts.

(Click for full resolution)

15-min chart:

aapl-15min-062714close

– Descending channel breakout? I think so (for what little that’s worth), though I guess the answer to that depends on whether you think there’s a channel in the first place. The top darker green descending trendline? That sure looks valid. Notice how that “invisible line” asserted its existence today. And that might be the more important trendline anyway. After all, there’s no escaping a downtrend without breaking that trendline which previously contained all of the prior price action in the relevant timeframe.

– AAPL found a burst of momentum late Thursday, which carried over into Friday with a very nice, controlled bull flag following a very early morning mini-run. After that, a last-hour-of-trading breakout to end the week (well, more like last half-hour, but let’s not get too, ahem, technical here).

If this breakout’s for real, I’d say the measured move based on the late Thursday-late Friday bull flag formation is at least 1.5 points, which puts the measured move target based on that formation at around 93. Last broken record note on measured moves for a bit – the 93 target is much more “suggestion” than “inevitability”.

Hourly chart:

aapl-hourly-062714close

– Kind of reminds you of that “downside fakeout” (based on Bollinger Bands) from around May 30-June 4, doesn’t it? There was similar price behavior from May 15-19 or so.

– Yes, technical readings on this timeframe flip negative to positive and back much more quickly, but there’s a “bullish intensity” (see MACD-h and oscillators) that didn’t exist in prior, weaker attempts to gain ground (June 16 through this Thursday). It might fizzle out on Monday, sure, and AAPL has more to prove longer-term – like retake 95, or even 92 – but it does look different. Mirage or not, the bullish confluences seem to be adding up again to support/validate this first breakout attempt.

Daily chart (Reminder/Apology – trendlines don’t translate well across timeframes on this charting platform, so I’ll only mention them in their “proper timeframe context”):

aapl-daily-062714close

– What didn’t look that different was AAPL’s anemic, <50M volume. Until a 20M+ after-hours session, that is. Exactly what’s been driving the fairly robust, if front-loaded after-hours volume this Friday and last Friday, I’ll leave to others. Good ol’ weekly options? Russell re-balancing? Quarterly window-dressing favoring AAPL bulls? Who knows.

– So apparently, the 3-day move off the 89.65 countertrend low ended up with AAPL retaking all of the moving averages, with the SMA-20 perhaps the most important among them. At the very least, on this timeframe, AAPL “held where it had to” – with much better positioning into the current volatility compression phase. Granted, it’s gone from worrisome to neutral (for bulls), but it sure beats the bearish trend from last Friday (again, for bulls ;)).

– Notice how AAPL didn’t really stay below the 38.2% Fibonacci retrace level of a sub-move post-earnings. If that holds – that looks pretty bullish.

– Speaking of moves, if you consider the descending channel breakout as “eligible” for a measured move analysis – does that suggest a move of over 11 points from the breakout point (measuring from May 16?) Well, I’m not sure about getting to around 100 just yet (July earnings being a key test and all), but there are other measured moves that potentially point to that price level (daily chart comments from June 9 post, 2-day comments from May 27 post).

– Just in case I might be getting over-bullish (I try to keep my crayon reads as objective as possible, even though I may seem like I’m “forever playing catch-up”), let’s see MACD-h and the oscillators help “confirm” AAPL’s recovering momentum first. They’re all still in less-than-bullish territory as of now.

Wrapping up with the weekly chart:

aapl-weekly-062714close

– OK, so 100 is a bit heady of a price target for you? How about, potentially, 110? 😉

– Don’t look at me! 😀 “Blame” the price action on this timeframe. 73.07 low in mid-April. 95.05 high set in mid-June. Strong upward price action, 3-4 weeks of bull flag-type price action so far. Adjust the measured move to 20 points to be conservative, assume the breakout holds and measure from 89.65 (which isn’t really a breakout point, but we’re trying to curb any overenthusiasm here)…

– AAPL had two straight down weeks – somewhat forboding-looking toppy candles at that – and then turned in a very-low-volume, but still quite bullish, model hammer candle. Of course, follow-through (or at least further constructive-type trading) is needed to see if AAPL’s done with retrace. But if I was an AAPL bear, I’d probably be a bit nervous right now.

– Yes, volume for the week was absurdly low. When was the last time it was lower? But AAPL’s also trading in a much-higher-liquidity environment than it has in some years, with increased option trading costs, and that’s before all of the “acting superbly well above the mega-macro trendline, MACD-h/oscillators still looking very bullish, AAPL never even touched the EMA-8 weekly” stuff. So I’m not sure low volume is much of a bearish signal just yet (though I’m not ignoring it either).

– Quick valuation note, presented without comment. AAPL’s current multiple is about 15.4. The S&P 500, 19.3.

Next week will be an interesting one. Holiday-shortened, but also near quarter-end, and AAPL’s starting to show up on trading/investing radars again.

Enjoy the weekend, and I’ll see you Monday!

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