Hardly the End for Apple

Apple, $AAPL, has had a monster run since we were all worried about whether or not the stock was dead money when Steve Jobs died. Wednesday was a monumental blow off top according to many, and it may well prove to be. But outside of the day trading world what does Wednesday’s action really mean? Protect and pause. Here is one view in three timeframes.

Apple, $AAPL – Daily

On the daily chart it did print a big bearish engulfing candle, but you knew that. Volume was the highest it has been in over a year. The Relative Strength Index (RSI) is down sharply, getting a lot less scary but still over 75, and the Moving Average Convergence Divergence (MACD) indicator is starting to fade lower. This timeframe is biased to the downside. 480 or even 460 would be a decent target if it continues. That surprises noone I’m sure as all the chatter has been about Apple. It has become a bubble of sorts. But what about on a longer timeframe? The weekly chart below has some disturbing features to a long holder, but is not nearly as scary as that daily chart. The potential Gravestone Doji is the scariest feature, but there are still two trading days left in the week. A move back to even 510 could change that. But on the other side of the coin, the Bollinger bands

Apple, $AAPL – Weekly

continue to open to allow for a continued move after a long period of tightness through November and December. The RSI on this timeframe is high but only in the low 70’s and the MACD is rising. These are bullish. All of the Simple Moving Averages (SMA) are also sloping higher and show no signs of cracking. The monthly chart suggests it may just rest here, but does have potential to move higher. The bullish Wave count could see an acceptable move to 598 before a major downturn. The RSI is elevated on this timeframe and could use a break to let it correct. But the MACD is growing. A pullback to 430 will not impact the upside bias. I know,

Apple, $AAPL – Monthly

not what you wanted to hear, but hey I also told you it could get to 600, right. Protect the downside if you are long, and if you are not then sell puts on the 450 area as an entry. Or just wait for the pullback or pause to make it self known and then play it. If it cracks 430 then you can start to worry. Until then this story is not over.

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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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