It has been a while since Apple (AAPL) has piqued my interest for a trade, but Apple stock’s movement over the past two weeks is beginning to look more conducive for a more meaningful move to the upside.
When looking at Apple stock charts, it’s important to realize that AAPL no longer has the dynamics it once had in its heydays of 2011 and first half of 2012.
The company itself might still be in great shape (I use Apple’s product and like the company), and the stock might still be heavily followed … but other stocks such as Tesla Motors (TSLA) have taken more of a center stage presence. This is a natural course of action — cult stock status is rarely assigned to any single name for more than a couple of years before the buzz surrounding a company settles somewhat.
For the active investor and trader, this means that AAPL still is worth following closely, but also one where marginally more patience is needed between trading opportunities.
On any given day, Apple rumors and news items are aplenty. Much of the recent chatter has focused on the next iPhone, which should have a larger screen and thus more adequately compete with some of the Android-based phones.
It remains to be seen what the next generation of iPhones looks like, and more importantly for Apple stock holders, how AAPL’s price reacts to all of this … but the longer-term picture on the charts offer some key levels to focus around.
Apple Stock Charts
AAPL has nicely rebounded off its April 2013 bottom, but bigger-picture, it still has to overcome its December 2013 highs near $575 to overcome a major hurdle. The resistance point at $575 coincides with the 61.8% Fibonacci retracement level of the entire selloff from the September 2012 peak down to the spring 2013 lows. Again, this is a big-picture level, not the immediate term.
Being a trader, I have to be open to all possibilities … and until Apple stock can move above $575, it’s still at risk of falling back all the way into the mid-$400s. I’m not saying this will happen; I’m merely keeping myself and my readers aware for the sake of managing risk.
The Apple stock chart covering closer-up time frames is providing clearer signs that the next move will be to the upside. For the first time since last July, AAPL is trading right at the collusion of its 50-day (yellow) and 100-day (blue) moving averages. These types of confluence levels often lead a stock to either push higher or find resistance, thus making me watch Apple stock closely here.
Very simply put, if AAPL manages to put a little distance between itself and these two moving averages — say, a move past the $540 area on the upside — then it could lead to better upside momentum and a move toward $560 and $570, and ultimately $590.
So, for now, I’m currently circling the $540 level for better upside potential in Apple stock. Trade accordingly.
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Download Serge’s trading plan in the Essence of Swing Trading e-book here. As of this writing, he did not hold a position in any of the aforementioned securities.