Last Monday, I discussed how Apple stock (AAPL) finally broke out past the $528 area, opening up the gates toward $580. I also mentioned that after a three-day, 6% rally, the stock was getting near-term overbought and that I was taking profits. AAPL stock then paused for exactly one day before continuing its ascent toward $575 a few days later. From a swing trading perspective, however, which is my approach to the markets, the AAPL stock week-over-week has broadly traded sideways, digesting the run-up that began with the Nov. 26th breakout.
All the while, AAPL stock held its 8-day simple moving average (blue line) and began to build a new technical base from which it could push higher, making the stock more attractive from a swing trading point of view.
To dig my teeth back into a long position in AAPL stock again, I would like to see more commitment from the bulls to push the stock at the very least back above the $570 area on increasing volume, which would result in a break past the red diagonal line below, connecting the intra-day highs over the past few days.
AAPL stock reacts well to its various technical support and resistance levels, as well as to overbought and oversold readings. But to trade the stock well based on those parameters, traders need to have an idea how it looks in various time-frames. For my part, this means at the very least studying its daily and 30-minute charts to map out reference levels.
But right now, it looks like more upside for AAPL stock.
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Learn more about the strategies Serge Berger uses to create profits in the market every day. Download his trading plan in the Essence of Swing Trading e-book by clicking here. As of this writing, he did not hold a position in any of the aforementioned securities.