Apple’s (NASDAQ:AAPL) latest and greatest roll-out is still a month away. But on the Apple stock price chart it’s nearly showtime for bullish investors, coupled with well-constructed purchases for enjoying healthier risk-adjusted returns in an ever-volatile market.
This past week was a tough one for the broader averages. First there was the well-publicized whistle-blower report of underhanded dealings by POTUS with the Ukrainian government. That was followed by tons more ‘fake news’ coverage and of course, a Democrat-driven impeachment investigation later in the week. But that’s not all investors, as well as Apple stock traders, had to deal with.
To close out the period there was more potentially threatening news. On Friday the Trump administration further rattled Wall Street as it was learned officials were looking at American’s investment exposure to China and possibly the de-listing Chinese stocks from U.S. exchanges. To say the least, Wall Street had its hands full. It wasn’t exactly a great time to be buying a market-weighted name like AAPL stock, right?
For its part the S&P 500 finished down a hair under 1.0%, while the tech-heavy Nasdaq Composite dropped nearly 2.0%. Unsurprisingly, many of Apple’s heavyweight tech showed fairly well correlated losses. Microsoft (NASDAQ:MSFT) closed down 1.23% for the week. And others like Amazon (NASDAQ:AMZN) and Facebook (NASDAQ:FB) racked up much larger declines of nearly 4% and 7% respectively. Yet AAPL stock finished up 0.50%.
What gives? Why did AAPL shares manage to defy the market this past week?
Bottom-line, it’s been a busy and productive September with the release of the iPhone 11 and the company’s mobile gaming service Apple Arcade. Each has received their share of praise and more importantly, paying customers here in the U.S. and internationally despite the trade war and worries of a global recession. And that’s not all.
A month from now Apple will continue to dig its heels into its services business with the debut of Apple TV+. The subscription product follows Apple Music, Apple News and Apple Arcade. At a roll-out monthly price of $4.99, all-but-given original content that’s sure to please millions upon millions of active users, Apple’s aim to continue growing that side of its business looks strong to say the least.
AAPL Stock Weekly Chart
Shares of AAPL are within a couple of percents of where they sat a year ago. But unlike 2018 and entering into what proved to be a very difficult correction for investors, AAPL has worked its way into a position of strength. And in our observation, it’s working its way into a solid buyable position.
Apple has just finished a two-weeks inside candlestick pattern just above the 76% retracement level of its year-long base and within an uptrend which began last December. It’s enough technically to anticipate AAPL is poised to breakout in the coming days and then move on to fresh all-time-highs.
Is the Apple stock price chart and technical set-up perfect? No. But if there weren’t any blemishes, I’d personally be a good deal more wary of the situation. That’s not to say, an overbought stochastics, October’s notorious volatility or the possibility for a double-top to form should be ignored. They shouldn’t.
What I’d recommend is simply respecting AAPL stock’s bullish trend, which despite today’s political theater, has managed to prevail in a very constructive technical manner. Right now, one straightforward approach to buying Apple is to put shares on the radar for purchase on a confirmed breakout of the inside pattern.
A breakout entry could be considered on a move above last week’s high of $222.49, the high of $223.76 set two weeks ago or even the formation’s engulfing candlestick high of $226.42. All of these methods offer some sort of bullish price confirmation.
My takeaway, however, is given the broader market, I’d advise going with the middle of the road entry and use the pattern low to avoid a premature purchase, possibly waiting too long and smartly minimizing risk in all three scenarios in a sometimes unforgiving October.
Investment accounts under Christopher Tyler’s management do not currently own positions in any securities mentioned in this article. The information offered is based upon Christopher Tyler’s observations and strictly intended for educational purposes only; the use of which is the responsibility of the individual. For additional options-based strategies, related musings or to ask a question, you can find and follow Chris on Twitter @Options_CAT and StockTwits.
