It has rarely paid to be bearish on Apple (AAPL) as the stock has been a long-run winner. The buy-and-hold investor has made out the best in the past thirty-plus years, but once in a while the charts tell a message that we need to pass on. Let's check.
In the daily bar chart of AAPL, below, we can see that share prices have struggled several times on approach to $180. Rallies have failed. The 50-day moving average has weakened.
The On-Balance-Volume (OBV) line has weakened since early December. The trend strength measured by the Moving Average Convergence Divergence (MACD) oscillator shows a weak pattern.
In the weekly Japanese candlestick chart of AAPL, below, we can see the past three years. Looking closely we notice that when AAPL has retreated from a high it is taken less time than now to rally and reach a new high. Also we can see that the rising OBV line has crested. Last, there is a significant, long-term bearish divergence between the price action and the MACD oscillator.
In this daily Point and Figure chart of AAPL, below, we can see a potential downside price target of $153. A decline to $153 does not seem like a lot but it would break the 200-day moving average line and set up prices for a test of the March low.
Bottom-line strategy: Don't label me an Apple bear but right now the charts suggest that some near-term caution is warranted. How you handle it is up to you.
