On July 25, I discussed here that with Apple (AAPL) pushing past the $430 area, it hurdled past an important point:
“The $430 level is a confluence zone made up of the May downtrend line and the 50-day and 100-day simple moving averages.”
I further mentioned on the same day that by overcoming the $430 area, Apple stock also opened up the gates at least toward $465, which has been tough resistance since March.
Fast-forward to today, and with Monday’s continued push higher, Apple stock managed to close past the $465 line, at $469.45. Momentum remains on AAPL’s side, and a next resistance area is the 200-day simple moving average (red line), which currently comes in near $475, or just 1.3% from yesterday’s closing print.
Considering Apple stock has now rallied more than 20% in 29 trading days, it might be time for a little breather before ultimately pushing higher again. But how high do I think this cult stock will eventually rise on the back of the momentum push past $430? The area around $500-$520 looks to be reachable within the time frame of two to three months, barring any significant setbacks. This price area would also coincide with the 38.2% Fibonacci retracement of the entire selloff from the September 2012 highs down to the April lows, i.e., a good medium-term resistance point.
Close-up, on the 60-minute chart of AAPL, note that the rally off the June lows has now reached the same distance as the rally off the April lows did … right before it ended.
But momentum, as measured by the MACD oscillator, is not yet flashing any negative divergence versus price, which indicates that at least marginal further upside in Apple stock is possible — maybe toward the $475-$480 area — before a healthy near-term consolidation phase might set in.
Serge Berger is the head trader and investment strategist for The Steady Trader. As of this writing, he did not hold a position in any of the aforementioned securities. Sign up for his free weekly newsletter here.