Is Apple (AAPL) finally starting to make its move? Here’s my take….Discussed in this article: Apple Inc., AAPL
I want to look at Apple ( $AAPL Apple Inc. ) today. Look, I know it went up two percent today but it’s still kind of mired in congestion. But here’s one technical thing that you’ve got understand; look at the 50-day moving average, which is basically defined resistance. Well, as the stock starts printing these lows right around this level, after the decline that it’s had, 50-day moving average keeps drifting lower along with the decline, and then suddenly the stock starts trading sideways.
Well, it’s taken the 50-day moving average time to catch-up with this. Now the 50-day moving average doesn’t continue to drop, now it’s about drifting sideways. The reason is because the last twenty or thirty days or so the stocks basically been at this level. This is actually pretty obvious, but only, a lot of times, after its pointed out to you. So if the 50-day moving average is resistance for this, what’s been happening is the stocks had to make a run because it’s been so far below the 50-day moving average by the time it comes up to test it there’s been so much buying pressure used up that there’s just not too many folks that are still willing to buy Apple ( $AAPL Apple Inc. ) because it’s already made such a big run.
Here, a similar kind of thing, here we didn’t even really get to it, and then finally down here the stock had to make quite a run just to test the 50-day moving average. It went from here, you know the 50-day moving average is up here, so it’s still pretty far down, not as far down as it was here, or certainly, here. Now though, we’re at a point where this recent low is just barely below the 50-day moving average so it’s not taking that much buying pressure to push Apple ( $AAPL Apple Inc. ) up to test the 50-day moving average. Well, so let’s say Apple ( $AAPL Apple Inc. ) continues through the 50-day moving average, which it’s likely to do if the NASDAQ starts picking up steam, it’s just now started to perform.
Well if Apple ( $AAPL Apple Inc. ) blows through the 50-day moving average it’s not just going to go up in a straight line, sorry, but what we would look for, at that time, would be some kind of a pullback to hit a higher low, to not come down to this bottom, but instead a little pullback and then start to move higher. This right here is when it would be the safest time to buy Apple ( $AAPL Apple Inc. ). You go ahead and buy it now and then if Apple ( $AAPL Apple Inc. ) does in fact breakthrough, pull back and then start moving higher; great, you got it at this time. However, let’s say the company announces earnings and they aren’t that great. Well then Apple’s ( $AAPL Apple Inc. ) come up here, it’s faked you out and fallen lower. You don’t want to do that.
So instead I would suggest waiting, if you want to take some Apple ( $AAPL Apple Inc. ) now, great, you’re about eight points too late, but that’s okay, you can still do it. I would suggest waiting though, before taking a big position in Apple ( $AAPL Apple Inc. ), wait for the stock to breakthrough, then come back and then start to move higher. So it’s the second move higher that we’re really most interested in because then you have a new low, a higher low, not this low here, where you’d put a stop under here, but a higher low where then you could put a stop under here; now your trading.
So anyway, try that technique on Apple ( $AAPL Apple Inc. ).