Apple: Positive Posture, but Overbought

Don't chase AAPL here; just wait for the green light

   

Back on April 25, I opined that Apple (NASDAQ:AAPL) was trading in a rather lackluster fashion. I went on to say that if I were to get interested in being long in Apple again, AAPL would have to trade above its 50-day simple moving average, which at the time came in around the $430 mark.

Since I wrote those words, the stock has staged a significant rally to the tune of 57 points, or around 14%. In full disclosure, I traded the stock to the long side when my signal flashed; however, I have since taken full profits and am now scouring the charts for the next trade setup.

Here’s what I see:

First-up, the longer-term chart looking back to the summer of 2011 gives us some perspective as to the level where Apple recently found a “bottom.” The July 2011-January 2012 period served as basing time for AAPL; also in this important trading range is the area from which the stock recently bounced. This area remains important if and when Apple ever heads down there again.

AAPLmultiyear Apple: Positive Posture, but Overbought

On the closer-up daily chart of Apple, note that the stock has now bumped into its downtrending 100-day simple moving average (blue line) near $463. While the stock is immediate-term overbought, the break of the September 2012 downtrend puts the stock into a positive formation that should lead to further gains in coming months.

I am not looking to chase the stock higher here, but a break above $466 should lead to a first target at $485, followed by $510-$514, which would fill the earnings down-gap from Jan. 24 (blue shaded area).

AAPLdaily Apple: Positive Posture, but Overbought

Last but not least, for those wanting a real close-up look of the stock, here is a five-minute-interval chart looking back several trading days. The white horizontal lines serve as interesting areas of support, as does the 200-period moving average (blue line). Shorter-term traders can use these reference areas to base trade against.

AAPL5minute Apple: Positive Posture, but Overbought

Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free weekly newsletter here.


Article printed from InvestorPlace Media, http://investorplace.com/2013/05/apple-positive-posture-but-overbought/.

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