I got another request for a Chart of the ever popular Apple. After yesterday’s close Louis wrote:
I have a new request for your chart view on AAPL. In the coming 2 weeks, do you see Apple bouncing off a bit to the 70 resistance or going down to the next support level at 62? What’s your view on the stock ?
When I looked at Apple a week ago I said “I’d probably just wait for stochastic to reach (near) oversold before trying to buy it.” Well, here we are thanks largely to their options pricing issues. My very fast stochastic is neat oversold but I see no signs of a bounce yet. Yesterday it looked like it would hold at the January – May trendline but that broke today. At this point I’d just let it drop until I saw some sign of strength. I’d like to see one or more of the following:
- One or more bullish candlesticks — a hammer would be nice.
- A close back above the January – May trendline.
- A stochastic buy signal.
- A bounce off of the 50-day moving average / the earnings gap.
Having said that, there are some things I really don’t like about the chart for a long candidate. I’m rarely thrilled about buying a stock that’s below its 200-day moving average. Apple slipped back under the 200-day yesterday. I don’t like that it’s fallen back under that January – May trendline nor that volume on each of the last 4 down days has been above volume levels for most of the post-earnings rally.
