Apple: Bullish above $430

Since on May 8th I wrote here ( that Apple Inc. (AAPL) was near-term overbought, the stock pulled back close to 10% over the ensuing six trading days.  By May 16th the stock subsided much of its overbought readings and now is back in a more neutral stands where bulls should have the edge again.

The longer-term chart of Apple Inc. (AAPL) is unchanged, which is to say that the stock found an important bottom in mid April from which of course it proceeded to bounce.  The April bottom was furthermore significant in that it formed two trading days before the company’s Q1 earnings announcement.  Just as doubters of the stock kicked into high gear, the post earnings announcement reaction likely surprised a bear or two, leading them to cover shorts.

From a technical point of view the April lows also coincided with an important consolidation area that dates back to the second half of 2011, as once again noted in the chart below.  This is to say that if and when the April lows should get broken, the stock would have further downside to at least the $355 area.

aapl multi year

Closer up on the charts the stock is, as mentioned above, back in more neutral territory, i.e. the overbought readings from early May have been worked off.  While the 50 day simple moving average (yellow) of Apple Inc. (AAPL) has become rather useless, its 100 day simple moving average (blue) acted as resistance at the early May highs.  For fans of head and shoulders patterns the stock currently also offers something, namely an inverted head and shoulders pattern (blue bubbles on the chart), with a neckline (blue diagonal line), currently near the $460 mark.  As long as the stock can hold above $430 it now favors an eventual push higher and past the 100 day moving average, the blue diagonal, and early May highs near $465.  This could then lead to a move up to near the $500 – $510 area over time.

aapl daily





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