Staples: SPLS Gets Giddy About Apple Pay

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Shares of office supplies retailer Staples (SPLS) jumped last Friday on the back of news that Apple is seeing record pre-orders on its new series of iPhone products. The price action also was technically significant — SPLS stock now looks ready to move higher after its rally earlier in the month, and active investors and traders have time to get in.

beat the bell stock investing adviceLast week, as Apple (AAPL) unveiled its new iPhone products and announced Apple Pay — the new purchasing mechanism for iPhone users — a host of companies announced their participation program, among them Staples.

Staples is already one of the largest Internet retailers, particularly in the office supplies segment, and its adoption of Apple Pay sounds to be mutually beneficial for both Apple and Staples (and customers, too!). Staples is looking to integrate Apple Pay into an iOS 8 app to enable maximum user-friendliness for its customers.

As a note, whenever Apple announces new products and services, AAPL stock is rarely where the juiciest trading action takes place; rather, shares of its suppliers and business partners typically see more interesting action.

SPLS Stock Charts

Looking at the multiyear weekly chart, note that since topping in 2006, SPLS stock has found itself in a choppy and downtrending environment. While momentum (as measured by the relative strength index) bottomed in June 2011, SPLS stock continues to struggle and this past July revisited its August 2012 lows. At the same time, however, the support line stretching back to the year 2000 does continue to hold, which at the margin is a positive development.

SPLS stock chart weekly
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On the daily chart, note the breakaway gap and rally from Sept. 2, which broke SPLS stock out of a multimonth sideways slump. The rally quickly moved the stock into diagonal resistance from early 2014, where it then began to consolidate during the past eight trading days.

While Staples stock still is lower by about 18% on a year-to-date basis, it also is quickly looking to catch up on the broader market’s performance. Last Friday’s 3.5% rally in SPLS came on an uptick in volume, albeit not as much as the big surge in volume on the Sept. 2 rally. The recent consolidation phase increasingly is taking the shape of a bull flag or wedge pattern that could soon resolve higher.

Last Friday’s rally also pushed the stock back above its 200-day simple moving average (red line).

SPLS stock chart daily
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Active investors could consider hopping on SPLS stock on a break past $13 for a move toward $15.

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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.


Article printed from InvestorPlace Media, https://investorplace.com/2014/09/staples-spls-stock-apple-pay/.

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