The key fairness averages completed the week ready of weak spot, with the S&P 500 index as soon as once more testing the important thing assist stage of 4200.
We have talked in regards to the 4200 stage many occasions for the S&P 500, most just lately by way of that pertains to the bullish momentum divergences we have observed on the SPX and plenty of large-cap shares. When the S&P and Nasdaq are testing key assist ranges, it is usually a good suggestion to take a look at a few of the bigger names that comprise these indexes. The key averages will likely be unable to carry assist if mega-cap shares are unable to do the identical.
That brings us to the chart of Apple (AAPL), which, up till this week, has proven pretty constant outperformance during the last 9 months.
AAPL first reached the $155 stage in September 2021; then, in November, the inventory broke above that stage and efficiently retested it from above. Apple then gained one other 25 factors to achieve its eventual peak round $180 in early December. From there, the inventory has pounded out a gentle sample of decrease highs, to this point placing in a decrease excessive in February and March.
Now we discover this mega-cap expertise identify pulling again as soon as once more to the $155 stage. Earlier lows in January and February have occurred proper round this identical worth level.
What’s totally different this time is that it additionally coincides with the 200-day shifting common. Will we as soon as once more see an inflow of shopping for energy to trigger the inventory to bounce as soon as once more off $155? Market bulls had higher hope so. As a result of if AAPL breaks assist at $155 (which I imagine it’ll, most probably subsequent week), then the subsequent stage of potential assist can be within the 132-140 vary. The low in October 2021 was round $140, and the primary Fibonacci assist stage (utilizing the March 2020 and January 2022 vary) is available in round $132.
What would inform me this bearish thesis is inaccurate? Two issues come to thoughts.
First, AAPL would want to interrupt above trendline resistance utilizing the January and February peaks. The trendline at the moment sits proper round $168. The 50-day shifting common is true round this worth stage as nicely, so a transfer above $168 would clear two necessary technical hurdles.
The opposite indicator I am watching is RSI. The RSI for Apple has been in a bearish configuration (beneath 60) since December of final 12 months. If the RSI would break again above 60 on a worth bounce, that might point out an inflow of consumers with sufficient momentum to push the worth even larger.
As traders are coping with plenty of regarding macro themes in latest weeks, the Fed assembly developing subsequent week could possibly be simply the catalyst to maneuver charts like AAPL into a brand new downward section of this bear market expertise.
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RR#6,
Dave
David Keller, CMT
Chief Market Strategist
StockCharts.com
Disclaimer: This weblog is for instructional functions solely and shouldn’t be construed as monetary recommendation. The concepts and techniques ought to by no means be used with out first assessing your personal private and monetary scenario, or with out consulting a monetary skilled.
The creator doesn’t have a place in talked about securities on the time of publication. Any opinions expressed herein are solely these of the creator, and don’t in any manner signify the views or opinions of every other particular person or entity.
David Keller, CMT is Chief Market Strategist at StockCharts.com, the place he helps traders decrease behavioral biases via technical evaluation. He’s a frequent host on StockCharts TV, and he relates mindfulness methods to investor choice making in his weblog, The Conscious Investor.
David can be President and Chief Strategist at Sierra Alpha Analysis LLC, a boutique funding analysis agency centered on managing threat via market consciousness. He combines the strengths of technical evaluation, behavioral finance, and knowledge visualization to establish funding alternatives and enrich relationships between advisors and purchasers.
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