Apple: What the 10-Year Monthly Chart Says
The short-term market is hard to read, so try zooming way out for the long-term view of this tech titan.
Here are a couple key takeaways:
1. Apple’s recent undercut of the $500 mark touched and bounced off the 20-month moving average support. Over the past 10 years, this moving average has been broken once (confirming a deeper sell-off) and has been supportive twice (in 2006 and 2008). But I like the comparison to 2008 better; it held initially, producing a nice “backtest” rally, before failing and confirming the aforementioned deeper sell off. Either way, the 500 mark looks like an important toggle to watch on a closing basis.
2. The stock has room down to $425-$450 long-term uptrend support. This doesn’t mean that it is magnetized to this level on an immediate basis, but the trend line is there and rising… for now or later. If a break of $500 is sustained, then anything can happen. I have a rather small long position in AAPL (initiated today), but will look to add closer to $500, with the idea of catching an oversold rally that could give the stock some breathing room and put some change in my pocket.
The market is still sending mixed signals, so I am keeping positions small looking to add or cut bait as the price action dictates. Trade safe, trade disciplined.
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.
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.
Copyright 2011 Minyanville Media, Inc. All Rights Reserved.