Can the stock market extend its 2019 gains into 2020? Jim Cramer told viewers during Friday night's Mad Money program that if you look at the top 10 performers in the Dow Jones Industrial Average (DJIA) you'll see that it can.
Apple (AAPL) topped the best performers last year, up 86%, and Cramer said his recommendation remains the same. Own it.
In this daily bar chart of AAPL, below, we can see that prices have been in a strong uptrend since early June. AAPL is trading above the rising 50-day moving average line and perhaps extended above the rising 200-day moving average line. The trading volume has been heavier since August telling us that volume has expanded in the direction of the trend - something technical analysts like to see.
The daily On-Balance-Volume (OBV) line has been trending higher since early June telling us that buyers of AAPL have been more aggressive for months.
The Moving Average Convergence Divergence (MACD) oscillator (bottom panel) is in a bullish configuration above the zero line since the middle of June.
In this weekly bar chart of AAPL, below, we can see a bullish picture. Prices are above the rising 40-week moving average line. Prices look extended above this longer-term moving average but that does not mean that prices have to correct lower. A sideways correction or consolidation could develop.
The weekly OBV line has moved up to a new all-time high to confirm the all-time price high. The weekly MACD oscillator is in a strong outright go long pattern well above the zero line.
In this weekly Point and Figure chart of AAPL, below, we can see a "straight up" rally. This weekly close only chart is still projecting higher prices with a $330 potential objective.
Bottom line strategy: Some analysts and traders have been calling for a top in APPL for a long time and they have been disappointed. At some point in time AAPL will become overly extended and/or build a top formation. Today does not look like either condition will happen. Traders and investors who are long AAPL should continue to hold those positions while considering to raise sell stops to a close below $280. The $330 area is our next big price target.