What a difference a day can make.
Thanks to Wednesday’s rally, there is life back in the charts of Apple (AAPL). Last week — after AAPL stock failed to commit to any follow-through buying after the Dec. 23 rally and subsequently began to consolidate yet again — I said that there was little opportunity in AAPL stock for the time being. (Though to note, the majority of my trading takes place in time frames longer than one day, so my views don’t reflect intraday opportunities.)
Late last week, AAPL stock consolidated below its 50-day simple moving average (yellow line on the below chart). Then on Monday, amid the broader-market selloff, Apple shares bumped into the June uptrend, but managed to close the day off their intraday lows. By Tuesday morning, buyers came back into AAPL stock and pushed it right up to the immediate-term resistance line at $547, which I pointed out last week as the level above which I would get interested on the long side again.
With Wednesday’s rally, AAPL has now completed a swing bottom and the beginning of a new upswing.
If we take a closer look at the daily chart of AAPL stock, we note that it’s also once again trading above both its 8-day (blue) and 21-day (yellow) moving averages, which I use as my immediate-term averages for trend signals.
Wednesday’s rally in the stock didn’t just take place intraday, but started out with a bang as the stock gapped up and past the $547 resistance line, right at the open. This indicated good buying power and is another thing the bulls can hang a hat on. If AAPL stock can maintain the upside momentum, I see the next upside target at $580.
The Apple earnings report is scheduled for Jan. 27, so circle that date on your calendars. I will not be holding any position in AAPL stock through the announcement. The biggest risk for bulls from now until the earnings date is that Wednesday’s rally was just another one-day wonder, like the Dec. 23 rally.
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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.