Apples Bounces from Key Support

Apple’s slow slide lower accelerated earlier this week after falling through trend line support at 125.

This trend line buoyed prices seven times since mid-March (blue ovals), but the jug can only go to the well so often before it breaks.

Once Apple (Nasdaq: AAPL) broke below 125, it quickly moved to 120 on high volume.

120 is important, because it represents the November and January highs.

It just so happens that the 200-day SMA is just below 120.

The 200-day SMA is the go-to indicator for many investors, which ironically makes it more susceptive to whipsaws.

With or without whipsaw, 120 is an important level to watch.

Another important level (based on the log scale chart) is 116.

In terms of AAPL’s ‘summer to-do-list’, there are open chart gaps at 114.36 and 99.96, which may want to get filled

July 21 is an important date if you’re thinking about buying or selling AAPL. That’s when AAPL releases its earnings (after the bell).

AAPL tends to pop the day after earnings (pink), but that’s not guaranteed. The last all-time high occurred the day after earnings, and it’s been down ever since.

According to UBS, half of AAPL’s revenue growth cames from China. According to FactSet, China accounts for 16.2% of AAPL’s total revenue. Chinese stocks are down 30% since June 5. This could make its way into earnings … and spook investors.

AAPL seasonality suggests being careful in July and early August. Click here for AAPL seasonality chart.

Simon Maierhofer is the publisher of the Profit Radar Report. The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013 and 17.59% in 2014.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.

 

I Spy … The Most Insightful AAPL Chart

Apple is the most important stock on planet earth.

It’s the biggest component of the S&P 500 (NYSEArca: SPY) and Nasdaq (Nasdaq: QQQ). As of March 18, it will also be part of the Dow Jones, where it will rank as #6 of 30 (at least initially). Not bad for a “newcomer.”

The ebbs and flows of AAPL will affect almost every corner of the stock market universe.

When AAPL coughs, the market will get a cold. What are the odds of AAPL catching a cough?

Historical Dow Jones Curse

Historical data shows that inclusion into the prestigious Dow 30 club is more of a blessing than a course, at least short-term. 9 of the 15 components added since 1999 lost on average 6.3% within the first month.

Technical Blessing?

I invite you to inspect the AAPL chart with me.

Support: Green lines at 120 – 122.

Resistance: The chart only shows one red line, but there are actually two red lines (one going back almost 20 years) converging around 140. Prior to that, there’s black trend channel resistance around 132.

Interpretation: Although the brief spike above the black trend channel (accompanied by a bearish RSI divergence) could be a throw over top, I personally favor higher prices as long as AAPL stays above 120.

This is in conflict with the ‘Dow curse,’ but in harmony with AAPL seasonality (view AAPL seasonality chart here).

Sentiment may also support further AAPL gains, as the iWatch failed to garner much excitement (it’s easier to beat low expectations).

  • Bloomberg: Apple watch is a really poor product
  • MarketWatch: 3 reasons to think twice before buying Apple watch

Summary: Support at 120 – 122 deserves being watched closely. I favor further up side as long as support holds. However, a close below 120 cautions of a deeper correction.

Simon Maierhofer is the publisher of the Profit Radar ReportThe Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013 and 17.59% in 2014.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.

AAPL Drops Right Before Annual ‘Shock’ Period

A bigger and better iPhone, the new iWatch and new AAPL all-time highs … Apple has a lot of good things going. But, ironically this exciting time of the year (in terms of product launches) is the most treacherous for Apple shareholders.

Autumn is an exciting time for Apple geeks, but a treacherous time for Apple (Nasdaq: AAPL) shareholders.

Product rumors are planted in the spring and ripen in the fall as rumors mature towards tangible reality. Apple fans are hoping to feel, touch and buy a big screen iPhone or even an iWatch.

Ironically the autumn excitement doesn’t spill over to AAPL shares. September 21, 2012 was the kickoff for a 45% correction and August 19, 2013 saw a 12% pullback.

The August 24 Profit Radar Report summed up Apple’s position like this: “AAPL rallied to new all-time highs. As the chart shows, AAPL is just above green trend line support and just below red trend line resistance. AAPL seasonality points higher for another few weeks before the biggest seasonal weak spot of the year (AAPL topped on Sep. 22, 2012 at 705, split-adjusted). In short, the path of least resistance is up, as long as AAPL doesn’t close below 100. Danger will rise in mid-September.”

A detailed full-year AAPL seasonality chart is available here.

The chart below shows the various trend lines and support/resistance levels mentioned.

AAPL sliced below 100 on Thursday. Support around 100 has now become resistance. Green trend line support is at 97.

Based on seasonality, risk is rising and the path of least resistance is down as long as trade remains below 100 – 101.

Apple’s ‘bad Thursday’ spilled over to the Nasdaq-100 as the PowerShares QQQ ETF (Nasdaq: QQQ) painted a big red candle.

Thus far, QQQ remains above support at 99. A close below 99 may elicit more selling.

Simon Maierhofer is the publisher of the Profit Radar Report. The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.

What the Seasonality Chart Predicts for Apple (AAPL)

Many forces affect the market and individual stocks. Seasonality is one of them. In fact, AAPL seasonality shows a distinct drop in September, which is when AAPL started its 45% decline. Here’s the full seasonality chart.

In September 2012, Apple (NasdaqGS: AAPL) accounted for 20% of the Nasdaq-100 and 5% of the S&P 500 (NYSEArca: SPY).

AAPL was the single most influential stock in the financial universe, the MVP of the Nasdaq and S&P 500.

It was back then when I decided to put together an Apple seasonality chart for Profit Radar Report subscribers. Apple seasonality is based on daily price action going back to 1998, which is the year Steve Jobs came back to U-turn Apple from near bankruptcy to profitability.

Since 1998, AAPL has gone from $1 to $100, so the seasonal bias is distinctively bullish in most months. The biggest exception is September.

AAPL seasonality was one of the reasons why the Profit Radar Report turned bearish on Apple and issued this, at the time shocking recommendation, on September 12, 2012:

“Aggressive investors may short Apple (or buy puts or sell calls) above 700 or with a close below 660.”

AAPL seasonality shows some weakness in mid-July, but projects higher prices from early August to mid-September.

The interesting thing about AAPL seasonality is that it doesn’t really match up with S&P 500 seasonality. The 2012/2013 AAPL bear market has shown that the S&P 500 (SNP: ^GSPC) doesn’t have to move in the same direction as AAPL.

Although AAPL is only 5% away from its all-time high, AAPL lost its dominance. Today AAPL makes up ‘only’ 13.24% of the Nasdaq-100 and only 3.22% of the S&P 500.

That’s because other stocks like Google, Microsoft and Amazon have rallied, while AAPL is trying to recover from its bear market.

Obviously, seasonality is only one factor that affects stocks. Here are five other things to consider about Apple:

3 Reasons Why Apple is a Buy – and 2 Reasons Why Not

Simon Maierhofer is the publisher of the Profit Radar Report. The Profit Radar Report presents complex market analysis (S&P 500, Dow Jones, gold, silver, euro and bonds) in an easy format. Technical analysis, sentiment indicators, seasonal patterns and common sense are all wrapped up into two or more easy-to-read weekly updates. All Profit Radar Report recommendations resulted in a 59.51% net gain in 2013.

Follow Simon on Twitter @ iSPYETF or sign up for the FREE iSPYETF Newsletter to get actionable ETF trade ideas delivered for free.

Up 28% – Will Apple’s Resurgence Last?

Based on chart analysis, AAPL has more room to rally and seasonality allows for higher prices. However, there is one fly in the ointment that could send the stock straight back down. Regardless, here’s support that should be watched for now.

Apple (Nasdaq: AAPL) just staged the biggest rally since September’s all-time high – shares are up 28% from the June 28 low.

Will the rally stick around or deflate?

AAPL Seasonality

The other day we looked at the first ever readily available AAPL seasonality chart. It pegged the September 2012 all-time high and the onset of this rally – View AAPL seasonality chart here.

AAPL seasonality projects a minor lull and another spike before a seasonal peak in September.

AAPL Technical Analysis

The AAPL chart shows a technical breakout. This breakout happened late July (green circle) when prices busted above resistance.

Unlike prior times (red circles), AAPL wasn’t rebuffed by resistance but defied resistance.

The July 29 Profit Radar Report commented on this technical breakout and suggested that: “Investors may leg into AAPL with a stop-loss just below 447.”

This was a low-risk trade set up, as support was only a couple points below the trading price, limiting risk to a mere 0.5%.

Apple’s big Tuesday spike hoisted price above another trend line, which will now serve as support.

Next resistance is around 520. As long as trade remains above support we’ll assume AAPL will get there. There are higher potential targets thereafter.

Multibillion-Dollar Tweet

The biggest concern about Tuesday’s mini Apple meltup is that it may have been caused by a news event or multibillion-dollar tweet. Via Twitter, Carl Icahn announced that he acquired a large position in AAPL.

This tweet increased Apple’s market cap by $12.5 billion. If the rally is only caused by a tweet, it could be quickly retraced. In my experience though, such external events (tweet) usually coincide with technical strength and are used to explain moves rather than causing a move.

AAPL Effect on Market

AAPL’s resurgence is happening as the overall market is showing weakness and sporting some bearish divergences.

AAPL is the biggest component of the S&P 500, Nasdaq (Nasdaq: ^IXIC), Nasdaq QQQ ETF (Nasdaq: QQQ) and Technology Select Sector SPDR (NYSEArca: XLK).

Although AAPL and broad market indexes were de-coupled from October 2012 – May 2013, Apple is still barometer for the broad market.

Despite some cracks, the major US indexes will have a hard time declining without the participation of AAPL.

As long as the S&P 500 remains above key support, there’s little to worry anyway.

Simon Maierhofer is the publisher of the Profit Radar Report.

Follow him on Twitter @ iSPYETF

 

After Many False Rallies, Did Apple Finally Bottom?

AAPL has delivered many fits and starts since last year’s all-time high, but every single one of them resulted in yet lower prices. For the fifth time in six months Apple shares are up more than 10%. Will this rally stick?

September 21, 2012: AAPL rallies to all-time high of 705.

April 14, 2013: AAPL falls as low as 385.

From high to low AAPL loses as much as 45%. During that time, AAPL rallies more than 10% four times. Since its April low, AAPL again is up 15%.

Is this rally here to stay or will Apple relapse again?

AAPL Seasonality

Apple has enjoyed a 10+ year bull market and the consistently rising prices are reflected in Apple’s seasonality chart.

Apple shares suffered larger drawdowns in May 2010 and May 2012, which contribute to the seasonal May/June lull expressed by the chart below.

Based on seasonality, May is not a great time to be long Apple in particular or stocks in general.

AAPL Technical Analysis

Apple’s ‘technical health’ appears better today than at any other time since last year’s high. This week’s rally pushed prices above double trend line resistance as well as the 20-and 50-day SMA’s. RSI is also at a 7-month high.

This is bullish price action, but there are two flies in the ointment:

1) Prices pushed above parallel channel resistance and the 20-and 50-day SMA just before embarking on the next leg down.

2) Apple seasonality is less than bullish for May/June.chart

Summary

Price broke above trend line resistance. Generally that’s bullish, but a previous breakout turned into a fake out.

We’ve been out of Apple for a while. The September 12, 2012 Profit Radar Report advised that: “Aggressive investors may short Apple (or buy puts or sell calls) above 700 or with a close below 660.”

Apple around 440 is certainly more attractive than AAPL around 700 and if Apple is on your stock ‘bucket list,’ now might be an opportune time to deploy some (not ‘all’ or ‘most’ of your) money. There was no bullish RSI divergence at the recent low. This cautions that the decline is not yet finished. The red trend lines should be used as a stop-loss level.