When I last chimed in on Apple (AAPL) on May 28, the stock had shown some positive signs, yet not enough to make me a compelled buyer. Specifically, I said:
“As long as Apple can hold above $430, it favors an eventual push higher past the 100-day moving average and early May highs near $465. This could then lead to a move up to near the $500-$510 area over time.”
Fast-forward to today, and this push past the 100-day simple moving average never came to pass. Instead, AAPL yet again ran out of steam and eventually crumbled lower.
A quick look at the long-term chart of Apple (AAPL) reveals that the recently renewed downturn in the stock now leaves it looking untouchable from the long side — at least for the time being. I first showed this chart on May 28, but updated it again today:
The consolidation phase in the second half of 2011 set a good support level for the stock, but also acted as the last base camp before the vertical incline into the 2012 pop-and-drop formation. From here, the bottom of the formation has notable next support around the $360 mark.
The daily chart looks just as lousy as the longer-term chart and again shows the significance, for now, of the 100-day simple moving average (blue line).
If and when Apple stock can throw itself back above that hurdle, I will look at it again from the long side. Until then, gravity still wants to have its way, and a retest of the April 19 lows near $385 seems to be a near certainty. Maybe AAPL bounces there, but if it fails to do so, then $360 should be ushered in pretty swiftly.
As the saying goes, “the trend is your friend.” Well, that trend remains lower.
As a side note, I usually perform a little monthly sentiment study on Apple stock, which — for the month of June — is showing investors caring less about the stock for the first time in years. This emotional drain should, over the longer-term, be exactly what the doctor ordered so AAPL can again begin to focus and react around the company’s top-and-bottom-line-sensitive topics.
For those interested in something special, here’s a long-term logarithmic chart of Apple that pretty much sums it up.
Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free weekly newsletter here.
