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Apple Technical Resistance and Key Levels to Watch

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Apple's stock is still on its heels. And this condition will continue until the stock price decisively breaks above the key AAPL technical resistance level.

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One of the major market stories over the past several months has been Apple's (NASDAQ:AAPL) fall from grace. And although it's certainly been overdone, it's still a great story to learn from; not so much from a technical analysis standpoint, but from a herding and greed standpoint. Many investors have been hurt, and many have learned that stocks and companies are never invincible, especially those in the consumer trends space. This isn't to say that Apple's stock is done-for, just that many calling for AAPL $1,000 have had to endure a 38.2% drop from the highs first… and that may not be the end of it. With this in mind, let's turn to the charts and see if we can identify some key AAPL price levels to watch, including overhead AAPL technical resistance.

In December 2012, I posted a long-term monthly bar chart of Apple stock, highlighting the importance of the 20-month moving average. Over the past 15 years, sustained moves through this moving average have signaled trend changes. And there have only been five of them (two to the upside, and three to the downside). With this in mind, Apple's stock is still on its heels (despite the recent 9% rally off the lows). And this condition will continue until the stock price decisively breaks above this key AAPL technical resistance level (currently at $507.92). I would be remiss if I didn't note that the recent bounce began off the long-term uptrend support line. (See chart below.)

AAPL Long-Term Monthly Bar Chart



But there is more to this $500 level than meets the eye, especially near-term. Looking at the daily chart below, AAPL has carved out a nice lower low bottoming formation and surged higher. As noted above, the $435 bottom is a 38.2% drop from the highs – a solid Fibonacci number (see 10 Tools and Metrics of Successful Investors). In that vein, a 23.6% retrace of the September high to January low would be $498.73. We also have AAPL technical resistance in the form of the major downtrend line, first quarter earnings gap-fill, and the November and December lows. All of these resistance levels reside just above $500! This is quite a confluence of AAPL technical resistance, especially when adding the 20-month moving average to the mix. Taking variance into account, the resistance zone expands to $495-$510. But were not there yet…

A move above the January 15 lows ($483.38), would likely magnetize the stock price back to this key zone. On the downside, support resides in the $455-$460 area. A move below this support would be reason for more caution. (See chart below.)

Trade safe, trade disciplined.

AAPL Near-Term Daily Bar Chart With AAPL Technical Resistance



Editor's Note: Andrew Nyquist is an independent investor based in the Minneapolis area. This article originally appeared on his investing and economics site, See It Market.

Twitter: @andrewnyquist
No positions in stocks mentioned.

The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice.

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