Trading desks the world over are emptying by the day as people begin to focus on the year-end respite and think less about trading. However, the drop in volume during the last two weeks of December does not mean there are no opportunities in the market — in fact, lower volume can mean less crowded trades, and thus smoother and slower price action in some big name stocks like Apple (AAPL).
On Monday, Morgan Stanley came out with a report on AAPL, saying it sees positive effects for AAPL stock from the company’s partnership with China Mobile. In the report, analyst Katy L. Huberty further reiterated her overweight rating and $630.00 price target on AAPL stock.
Last Tuesday, I discussed that AAPL stock is still very much consolidating its late November/early December rally and and that I would need to see a break past the $570 area on increasing volume to re-consider a next swing trade to the long side in the stock. Fast-forward to today and not much has changed. AAPL stock, very much like the broader market, is trading sideways with a slight downward basis — thus going nowhere fast.
In other words, from a swing trading perspective, playing AAPL stock from the long side remains neutral to weak. Patience is of great importance here, and staying on the sidelines is my preferred play for the time being.
In terms of support levels, the 21-day simple moving average (blue line), currently around $545.50 is a good next support level to watch for, followed by the 50-day simple moving average (yellow line) around $527, which also coincides with the June 26th breakout.
Even closer up on the 60 minute chart, note that AAPL stock just about closed the up-gap from December 3rd last Friday, which makes the area around $550-$553 a very first support level for those that like to look at these things very closely.
AAPL stock is still consolidating its recent gains, and considering last week’s price action, I would now need to see a push past $565 to again be interested in trading the stock from the long side.
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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.