Apple Stock Breaks Resistance … Now What?

On July 25, I discussed here that with Apple (AAPL) pushing past the $430 area, it hurdled past an important point:

“The $430 level is a confluence zone made up of the May downtrend line and the 50-day and 100-day simple moving averages.”

I further mentioned on the same day that by overcoming the $430 area, Apple stock also opened up the gates at least toward $465, which has been tough resistance since March.

Fast-forward to today, and with Monday’s continued push higher, Apple stock managed to close past the $465 line, at $469.45. Momentum remains on AAPL’s side, and a next resistance area is the 200-day simple moving average (red line), which currently comes in near $475, or just 1.3% from yesterday’s closing print.

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Considering Apple stock has now rallied more than 20% in 29 trading days, it might be time for a little breather before ultimately pushing higher again. But how high do I think this cult stock will eventually rise on the back of the momentum push past $430? The area around $500-$520 looks to be reachable within the time frame of two to three months, barring any significant setbacks. This price area would also coincide with the 38.2% Fibonacci retracement of the entire selloff from the September 2012 highs down to the April lows, i.e., a good medium-term resistance point.

Close-up, on the 60-minute chart of AAPL, note that the rally off the June lows has now reached the same distance as the rally off the April lows did … right before it ended.

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But momentum, as measured by the MACD oscillator, is not yet flashing any negative divergence versus price, which indicates that at least marginal further upside in Apple stock is possible — maybe toward the $475-$480 area — before a healthy near-term consolidation phase might set in.

Serge Berger is the head trader and investment strategist for The Steady Trader. As of this writing, he did not hold a position in any of the aforementioned securities. Sign up for his free weekly newsletter here.

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