Apple Inc. (NASDAQ:AAPL) stock has bounced sharply over the past month after nearly falling into the abyss in early/mid-May. In the past couple of weeks however, Apple shares began to stall at a technically important area of resistance.
Apple’s Worldwide Developers Conference (WWDC) starts today in San Francisco, and it could be the next toggle point to break the stock in either direction. As a result, two possible trades are setting up for AAPL stock.
When Apple reported its latest quarterly results in late April, investors sold the stock amid growth concerns. Through a multi-quarter lens, this downward trajectory remains intact, and although new iPhones are scheduled to be announced in the September period, investors still aren’t jazzed about AAPL, because the phones are expected to be more about additional small iterations than something significantly new, plus there’s no sign of a major new product class on the horizon.
Personally, I think AAPL stock will be a good buy again for the longer-term, but for the time being, I’m still looking to sell into rallies as opposed to buying the dips.
AAPL Stock Charts
Looking at the multiyear weekly chart of Apple, we see that despite the 30%-plus correction off its 2015 highs, AAPL stock remains above its 2009 trend support line as well as its red 200-week simple moving average. So through this lens, Apple remains in an upward trajectory.
If and when this support area (currently in the low $90s) breaks, selling pressure could accelerate, because trend followers and other investors would likely jump out of the boat.
On the daily chart, we see that the downtrend since the 2015 highs has left a well-defined series of lower highs, as marked by the red arrows. Although the May lows did see a marginal break below an area of support that spans back to August 2015, a notable lower low on a weekly closing basis thus far has yet to come to fruition.
In other words, the confluence support area from the 200-week moving average and the trend support line in the above weekly chart also lines up with key horizontal support on the daily chart. The 12% rally off the May lows two weeks ago found resistance at the 100- and now also the 50-day SMAs, as well as at an area of former technical resistance.
Active investors and traders could now consider taking an initial short position in AAPL stock upon a break below $97.50 for an initial move into the low $90s.
Alternatively, a daily close above $100 may open up a trade up to $104 to fill the down-gap from April.
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