Since my last take on Apple (NASDAQ:AAPL) on March 14, the stock has acted as the analysis suggested, which was to move past resistance and pop higher. With AAPL roughly 6.5% more in the black and inching toward a new band of resistance, let’s review the charts.
The quiet sideways action that I discussed earlier this month led to a stair-step higher by first breaking the downtrend line dating back to the September 2012 highs. After a few days of basing above the downtrend and just under the stock’s 50-day simple moving average, the stock made another push higher Friday that broke the 50-day. From here, while the stock is immediate-term overbought (if we look at the Stochastics momentum oscillator), the next upside target is another 4% higher.
To gain better perspective on the next area of resistance as well as support, let’s zoom in on the daily chart.
In the next couple days, I would like to see the stock hold near/above its 50-day SMA near $458. Below there, the next area of support is $450 — that’s one that should really hold if the breakout past the October downtrend line wants to bounce the stock somewhat further in the near-term.
On the upside, the highs from Feb. 11 are in focus. The target level is $485, and any move past there on a daily closing basis could set up for the second target. This next level higher is the top of the down-gap from Jan. 24 as it remains an attraction point. This second target is at $514, although if AAPL gets to $510, I would consider this target to have been hit.
All in all, Apple continues to trade constructively enough that at least the the $485 level has a good chance of being reached within the coming one to two weeks. Should the stock get to the second target around $510, it would have managed to crawl past the $500 mark, where plenty of desperate funds are waiting to dump at least some stock for “smaller” losses.
Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free weekly newsletter here.