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.

Will Apple’s Breakout Stick?

Apple has staged six unsuccessful breakout attempts in the last eight months. Each time AAPL rallied more than 10% just to roll back over. Now Apple is teasing investors with higher prices again. Will this rally stick?

Since its September 2012 all-time high at 705, AAPL has rallied more than 10% seven times … and failed every time.

An Apple a day may keep the Doctor away, but an AAPL a day certainly hasn’t kept the bear away.

In fact, AAPL (Nasdaq: AAPL) is trading 35% below its all-time high (it was down as much as 45%). Yes, somebody really upset the apple cart (ok, that’s the last apple/AAPL pun).

Bottom line questions: Does this bounce have sticking power?

The Apple chart below compares this rally with the prior six failed rallies (gray circles). Three differences are easily noticeable:

  1. Most prior rallies were unable to overcome resistance (red circle). Current trade is above two trend lines.
  2. Once the high was in place, the market rolled over quickly. Current trade is lingering above support.
  3. RSI is higher (although marginally) than at any other rally attempt (grey circle).

Prolonged price coiling, or consolidation, above trend line support at 447 (and 457) increases the odds of higher prices. Like a coiled up snake, AAPL may actually jump higher.

A drop below 447, 434 and 418, on the other hand, would point to new lows.

A look at Apple seasonality (ebbs and flows created by seasonal forces) provides additional clues about Apple’s next move.

Apple seasonality is worth investigating, because it doesn’t only affect AAPL. AAPL is a major component of the Nasdaq Index (Nasdaq: ^IXIC), Nasdaq ETF (Nasdaq: QQQ), Technology Select Sector SPDR ETF (NYSEArca: XLK), and S&P 500 (SNP: ^GSPC), so the ripple effects of AAPL seasonality can draw wide circles.

“Sell in May and go away” is a well-known (and accurate in 2008, 2010, 2011, 2012) seasonal piece of wisdom usually applied to the S&P 500.

As per the Apple seasonality chart, the moniker for AAPL should be “Sell in September and go away” and perhaps buy in August?

AAPL seasonality chartsuggested the steepest decline of the year starting on September 16. In fact, the September 16, 2012 issue of the Profit Radar Report recommended to: “short AAPL (or buy puts, or sell calls) above 700,”

Right on queue with seasonality, AAPL’s all-time high occurred on September 21.

This AAPL seasonality chart shows Apple at the cusp of the next seasonal signal.