Dell Beats Apple Hands Down

Apple (ticker: $AAPL) has been the innovation leader creating the first the iPod, then the iPhone, and the iPad. Dell (ticker: $DELL) has been right behind them creating the, um, ah, let’s see. Well I am sure they created something new recently, I have just never heard of it. Seems like with this backdrop Apple stock should be kicking Dell’s can down the road. But take a closer look at the last six months.

Apple, $AAPL

Since January, Apple has done nothing but move back and forth a descending triangle, the range tightening. But the chart of Dell below shows that it has been in a rising wedge for the first half of the year.

Dell, $DELL

Combining the two charts into the ratio chart below of Dell against Apple shows a rising channel since February. Currently the ratio is headed towards support of the bottom rail. As it gets close the Relative Strength Index (RSI) is at the mid line but pointing lower. The Moving Average Convergence Divergence (MACD) has also just crossed negative. Looks like there is about to be a pairs trade opportunity. Watch what happens at the test of support at the rail near 0.047.

Dell against Apple, $DELL vs $AAPL

Trade Plan: Buy 85 DELL and sell short 4 AAPL on a bounce off of the rail looking for a rise back to the top rail at about 0.052. If it breaks below the rail then Sell short 85 DELL and buy 4 AAPL looking for a move back to the gap up at the beginning of the channel at 0.040. Use a stop loss near the rail.

As always you can see details of individual charts and more on my StockTwits feed and on chartly.)

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The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.

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