Since my last update on cult stock Apple (AAPL), the stock has continued its push higher and found resistance in the $500-$520 area that I laid out at the time. As the company is scheduled to announce two new iPhones tomorrow, I thought it would only be appropriate to go through the company’s current stock chart with an update.
After rallying sharply off its double bottom from April and late June, Apple stock’s push past the $430 area was the first sign that the rally may be more than a fake-out run higher. The next important level that the stock had to overcome was around the $465-$470 area, which was simple lateral resistance dating back to mid-February, and also coincided with the stock’s 200-day simple moving average. As can be seen on the below chart, Apple stock sliced through this area as if it didn’t exist — further testimony that the bulls regained control of the stock.
By Aug. 19, AAPL was well inside my $500-$520 target area, and at $513 and change filled its post-earnings down-gap dating back to Jan. 24. Even though the stock has since pulled back a little, it continues to establish itself back above the $465-$480 area as well as above the 200-day SMA. From where I sit, this is constructive action that promises higher highs in coming months.
More near-term, AAPL’s product announcements tomorrow has the potential to swing Apple stock in either direction.
Of note, however, is that Apple stock’s current consolidation phase is shaping in the form of a wedge, which for the time being has a bullish tint to it.
To be more precise, should AAPL be able to push past $502, it could quickly move up for a retest of the Aug. 19 highs, where it then stands a much better chance of breaking to higher highs.
Serge Berger is the head trader and investment strategist for The Steady Trader. Sign up for his free Weekly Market Outlook Video here. As of this writing, he did not hold a position in any of the aforementioned securities.