Apple Inc.: AAPL Stock Is Dancing on a Cliff

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Shares of Apple Inc. (NASDAQ:AAPL) haven’t been immune from the post-Brexit selloff. In fact, AAPL stock has once again fallen to one of its most important technical support areas in recent years.

Beat the Bell: Apple Inc. (AAPL)This is not an immediate call to sell or short Apple stock, but the risk of an eventual break below key support continues to increase, and active investors and traders would be wise to respect this area.

As always, when I discuss shares of AAPL, I have to state that while I have concerns around the stock’s ability to rally in the near-term, I still see Apple as a vibrant company and a stock to buy on meaningful corrective moves.

And as a reminder before looking at the charts, Apple is set to release its next earnings report on July 19, which is about three weeks for today. So AAPL stock does have gap risk on that day.

AAPL Stock Charts

On the multiyear weekly chart, we see that over the past 12 months, Apple stock has mean-reverted back toward its 2009 red support trend line. What makes this line all the more interesting is that it also lines up with the stock’s blue 200-week simple moving average.

In other words, if and when AAPL stock snaps the trend line, it would break below a crucial line of support — one that plenty of institutional investors are watching closely as a point of reference.

Also note that unlike the rather swift mean-reversion move from September 2012 into April 2013, this most recent move off the summer 2015 highs had a more orderly flow to it, with a series of well-defined lower highs (red arrows). Thus, Apple shares are visibly putting more and more pressure on the aforementioned diagonal support area. The question now is, when will it snap?

AAPL stock chart weekly
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On the daily chart, I again marked this series of lower highs. Note that the lower high last November and again this past April took place right at the red 200-day SMA. The most recent lower high in May took place at the yellow 50-day and the selling pressure over the past couple of days now has AAPL stock right back near the year-to-date lows from May.

AAPL stock chart daily
Click to Enlarge

While Apple stock could be immediate-term oversold at this juncture, the evidence still points lower. I continue to see AAPL ultimately falling into the mid- to lower $80s before a better buying opportunity unfolds.

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Article printed from InvestorPlace Media, https://investorplace.com/2016/06/apple-inc-aapl-stock-dancing/.

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