Apple Chart Evaluation
Apple appears fairly bearish right here. So let’s go forward and a check out the chart.
As you possibly can see from January to February, I traced out a head and shoulders sample, which within the technical universe, is a bearish sample. It performed out and now it’s damaged the neckline. You possibly can see I’ve linked the lows in January to the current lows within the early a part of March.
Yesterday was a reasonably unhealthy day with fairly heavy promoting occurring. It was a distribution day; it was a better quantity day than Friday.
It appears like this morning the inventory is down a bit of bit as effectively. It’s down in the direction of the $171 space.
Indicators are bearish throughout the board
Wanting on the indicators beneath, you possibly can see that the MACD began to roll over in January from a slightly low stage. It was beginning to transfer increased, however all of the sudden has now turned decrease for a MACD promote sign. It’s oversold however that doesn’t imply purchase. Again when the MACD was at a better stage, the inventory began transferring sideways, a unfavourable divergence.
We hit that peak, which was slightly below the December highs, and rolled over once more. A collection of decrease highs and decrease lows is your textual content guide definition of a downtrend. Apple is in it, you possibly can’t combat it.
The Chandy oscillator, which measures relative power, is making decrease highs and decrease lows. You possibly can see that right here within the third pane.
And eventually, the final two.
Oversold doesn’t imply purchase!
The stochastics have reached a reasonably oversold stage. It may flip up once more, however once more, the problem right here for Apple is the truth that it’s been making a sample of decrease highs. And if we rally again as much as say $177-178, roll again down once more, it’s simply going to make one other decrease excessive on the chart, and we’re going to have that sample of decrease highs and decrease lows proceed.
The place can we see the potential of the inventory stopping and reversing? I’d have to have a look at the October lows right here which are available in at round $165. That was the extent that the inventory took off and actually managed an enormous transfer as much as the mid $190s in about 2 – 2 1/2 months.
The final chart I’m going to point out you is on the backside – Chaikin cash movement. You possibly can see cash movement has been out. You don’t need to be a genius to determine this one out. Take a look at the underside pane. It’s unfavourable. It’s been making decrease highs and decrease lows as effectively.
Attempt to view this inventory with out bias
With none biases – lots of us like Apple, we like their merchandise and so forth – however taking an unbiased, goal view of this chart you possibly can see it’s clearly bearish, it’s unfavourable.
One factor I used to be advised earlier than is when Apple is main the markets, you’ve bought to watch out. Probably, Apple could lead on the markets downward.
You may say to your self, ‘Bob, why weren’t we on this factor again in $180-185 when the inventory was loads increased?’
Properly, it wasn’t exhibiting these qualities of a bearish inventory as a lot as it’s proper now.
I’m a momentum participant. I purchase choices. And I feel that put choices could be a sensible transfer.
Once more $165 – it’s solely $6 – 7 down from the place we’re at now – probably an space the place the inventory may reverse. But when it does reverse again up, it’ll in all probability offer you a great alternative to purchase some places or quick the inventory.
In order that’s the Apple chart evaluation.
Don’t miss a single considered one of Bob’s charts! Get the Chart of the Week in your inbox each week!
