Apple ( AAPL) is the 'Stock of the Day' at Real Money with its annual fall event today in California. The company is expected to unveil three new iPhone models, an updated Apple Watch and more details on its new streaming service.
We looked at the charts and indicators of AAPL just last week, noting that "the Wall Street adage that it is not the news that is important but rather how a stock reacts to the news, I would take a defensive position with AAPL this month." The key level from the Point and Figure chart was "a trade at $199.42 will probably weaken this chart."
Let's see if anything has changed in a week.
In this daily Japanese candlestick chart of AAPL, below, we can see a possible high wave candle yesterday. This pattern has a large upper and lower shadow and can sometimes foreshadow a reversal.
The On-Balance-Volume (OBV) line is pretty flat and not suggesting aggressive buying or selling. The 12-day momentum study shows very little upside movement.
In this Point and Figure chart of AAPL, below, we can see a new high trade at $215.94 so strength to $218.10 is needed to refresh the rally. A decline to $199.42 is still a possible "weak link" on the chart.
Bottom line strategy: If the fanfare around product releases is fading or dare we say disappointing to jaded consumers it may be easy to envision a decline in the weeks ahead.
(Apple is a holding in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AAPL? Learn more now.)
