In our last review of shares of Apple (AAPL) on July 11 we wrote that, "A weekly trade at $150 should improve the weekly Point and Figure chart of AAPL. A rally to around $170 could unfold and that would go a long way in lifting the broad market averages."
With trading in shares of AAPL off to a strong start Friday on the heels of a better-than-anticipated earnings report a fresh look at the charts is in order.
In the updated daily bar chart of AAPL, below, we can see that the shares gapped higher, but they also gapped above the 200-day moving average line. Impressive price strength.
The daily On-Balance-Volume (OBV) line is pointed upwards and the Moving Average Convergence Divergence (MACD) oscillator is in a bullish alignment above the zero line.
In the weekly Japanese candlestick chart of AAPL, below, we can see more white real bodies (bullish) since our July 11 review. Prices (when they are plotted) will put AAPL above the 40-week moving average line.
The weekly OBV line shows new firmness from early June. The MACD oscillator has crossed to the upside for a cover shorts buy signal.
In this first daily Point and Figure chart of AAPL, below, we can see Friday's rally with the gap filled in. We can also see an upside price target in the $219 area.
In this second daily Point and Figure chart, below, we added volume by price. A band of potential resistance could be found around the $174 area.
Bottom-line strategy: Three cheers for the rally in AAPL. This rally will provide ammunition for the bulls. Continue to trade AAPL from the long side but let's check in on the action around $174 to see if we need to make adjustments.
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