Apple’s Technicals Are Falling Apart

by Sam Collins | July 25, 2012 9:44 pm

Apple Inc. (NASDAQ:AAPL[1]) — Apple provided the markets with a rare earnings disappointment[2] after the bell Tuesday. Revenues and earnings missed, and Q3 forecasts also let down Wall Street analysts.

Technically, Apple has been trading within a bull channel since mid-May. The initial support for the channel is the bullish support line at Monday’s low of $588, followed by the 50-day moving average at $580, which is its stop-loss point. That point was violated Wednesday morning. The next important support is at the June 28 low at $565. Both the stochastic and MACD have issued a sell signals.

Unless Apple can quickly reverse and close above its 50-day moving average, the near-term trend is down. A reversal is only a remote possibility in that Wednesday’s breakdown was accompanied by a bearish breakaway gap from $598.51 to 580.80. Even though the first support is at $565, it is likely that the May closing low at $530 is a more meaningful target for long-term buyers.

AAPL Chart

Trade of the Day Chart Key

  1. AAPL:
  2. a rare earnings disappointment:

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