In his "No-Huddle Offense" segment of Mad Money Wednesday night, Jim Cramer talked about which stocks are working and which ones aren't. He said investors need to be looking for secular trends that are working now and will keep working once the economy returns to normal. Eventually, when the economy recovers, stocks such as Apple Inc. (AAPL) will recover.
Let's check out the latest charts and indicators of this bellwether stock.
In the daily Japanese candlestick chart of AAPL, below, we can see a hammer pattern or a bottom reversal last week. We see bullish confirmation the next day and now prices are trying to move back above the 200-day moving average line.
Trading volume has been heavy the past five weeks and that could be enough time for weak hands to sell and stronger hands to become buyers. The On-Balance-Volume (OBV) line shows a decline from late January but now shows the start of a low.
The Moving Average Convergence Divergence (MACD) oscillator has narrowed and is very close to an upside crossover and cover shorts buy signal.
In the weekly candlestick chart of AAPL, below, we can see that prices have found some support around the highs of 2018. The week is not over but the current candle pattern looks like it could be a bullish engulfing pattern. We need to see confirmation next week. A close back above the 40-week moving average line does not seem too far away now.
The weekly OBV line shows limited selling the past two months and the 12-week price momentum study shows that the pace of the decline slowed this week versus last week.
In this daily Point and Figure chart of AAPL, below, we can see a projected a potential price target of $341 for AAPL -- a new high.
Bottom-line strategy: Traders, investors and portfolio managers will all be relieved if AAPL continues to recover. Ideally, if AAPL can dip slightly to around $240 it looks like a buying opportunity provided you can afford to risk a close below $228.