What Technical Analyst Might Say About Apple After Its Breakout
The title of world's largest company by market cap has gone back and forth of late between Apple 
AAPL, Microsoft 
MSFT and Nvidia 
NVDA, with no clear leader emerging.
With about a month left to go before the tech firm reports its fiscal third-quarter results, just how is this stock positioned, and are traders ready for what comes next?
Let's dig into AAPL’s charts to see:
A Long Sell-Off Appears to Have Ended
Apple sold off fairly harshly all the way into April after hitting a December top that nearly matched its July 2023 peak:
But the stock’s Relative Strength appears to be in a good spot:
However, Apple’s daily Moving Average Convergence/Divergence (MACD) looks a bit twisted:
Add it all up and AAPL appears to have gone into the start of a basing period of consolidation.
This occurred after the stock broke out from a cup-with-handle pattern with a $197 pivot (the purple pattern at right in the first chart above).
The breakout did stop about $15 short of where it could have based on some models. That leaves me wondering if this is a minor pause, or a more serious period of sideways consolidation that the stock has entered into.
A ‘Golden’ Crossover
Note that AAPL experienced a positive algorithmic reaction to a "golden" crossover (green circle below) of the 200-day Simple Moving Average (SMA), as denoted by the red line below, by the 50-day SMA (the blue line below). This move is historically considered bullish:
However, within the daily MACD, the 12-day SMA has crossed below the 26-day EMA (the red circle above), with the histogram of the nine-day EMA in negative territory (the blue circle). That historically tends to be a bearish signal.
Checking Out the Price Action
Let's take a closer look at the most recent price action, shall we?
While the charts would historically point to a good chance that the consolidation seen here continues sideways to form a base, there is just as good a chance historically that what we might be seeing is a much shorter-term "bull flag." That’s a pattern of continuance signaling potential further upside.
How might readers know which ends up being correct?
If AAPL hits resistance again close to $220, then the charts will historically tell us that it's likely a base. But if Apple treats the $220 like a springboard within a few days, then the charts historically tell us that this is probably a bull flag.
Bullish traders (those interested in only short-term price movements) will want to see that flag, while bullish investors (those interested in Apple’s long-term business prospects) will likely be fine with a base.
Conversely, bearish traders and investors will probably just want to see that 21-day EMA face a test from the upside.
This presentation discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty as to its adequacy, completeness, accuracy or timeline for any particular purpose of the above content. Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third party platform.
AAPL, Microsoft MSFT and Nvidia NVDA, with no clear leader emerging.With about a month left to go before the tech firm reports its fiscal third-quarter results, just how is this stock positioned, and are traders ready for what comes next?
Let's dig into AAPL’s charts to see:
A Long Sell-Off Appears to Have Ended
Apple sold off fairly harshly all the way into April after hitting a December top that nearly matched its July 2023 peak:
But the stock’s Relative Strength appears to be in a good spot:
However, Apple’s daily Moving Average Convergence/Divergence (MACD) looks a bit twisted:
Add it all up and AAPL appears to have gone into the start of a basing period of consolidation.
This occurred after the stock broke out from a cup-with-handle pattern with a $197 pivot (the purple pattern at right in the first chart above).
The breakout did stop about $15 short of where it could have based on some models. That leaves me wondering if this is a minor pause, or a more serious period of sideways consolidation that the stock has entered into.
A ‘Golden’ Crossover
Note that AAPL experienced a positive algorithmic reaction to a "golden" crossover (green circle below) of the 200-day Simple Moving Average (SMA), as denoted by the red line below, by the 50-day SMA (the blue line below). This move is historically considered bullish:
However, within the daily MACD, the 12-day SMA has crossed below the 26-day EMA (the red circle above), with the histogram of the nine-day EMA in negative territory (the blue circle). That historically tends to be a bearish signal.
Checking Out the Price Action
Let's take a closer look at the most recent price action, shall we?
While the charts would historically point to a good chance that the consolidation seen here continues sideways to form a base, there is just as good a chance historically that what we might be seeing is a much shorter-term "bull flag." That’s a pattern of continuance signaling potential further upside.
How might readers know which ends up being correct?
If AAPL hits resistance again close to $220, then the charts will historically tell us that it's likely a base. But if Apple treats the $220 like a springboard within a few days, then the charts historically tell us that this is probably a bull flag.
Bullish traders (those interested in only short-term price movements) will want to see that flag, while bullish investors (those interested in Apple’s long-term business prospects) will likely be fine with a base.
Conversely, bearish traders and investors will probably just want to see that 21-day EMA face a test from the upside.
This presentation discusses technical analysis, other approaches, including fundamental analysis, may offer very different views. The examples provided are for illustrative purposes only and are not intended to be reflective of the results you can expect to achieve. Specific security charts used are for illustrative purposes only and are not a recommendation, offer to sell, or a solicitation of an offer to buy any security. Past investment performance does not indicate or guarantee future success. Returns will vary, and all investments carry risks, including loss of principal. Moomoo makes no representation or warranty as to its adequacy, completeness, accuracy or timeline for any particular purpose of the above content. Moomoo is a financial information and trading app offered by Moomoo Technologies Inc. In the U.S., investment products and services on Moomoo are offered by Moomoo Financial Inc., Member FINRA/SIPC.
TradingView is an independent third party not affiliated with Moomoo Financial Inc., Moomoo Technologies Inc., or its affiliates. Moomoo Financial Inc. and its affiliates do not endorse, represent or warrant the completeness and accuracy of the data and information available on the TradingView platform and are not responsible for any services provided by the third party platform.
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