In our last review of the iPhone maker on May 12 we wrote that "AAPL is flirting with its October low. Some traders and or computers may try to defend this area and prices could bounce, but the odds favor still further declines in the weeks ahead. Avoid the long side until a real base pattern develops." Let's check out the charts again.
In the daily bar chart of AAPL, below, we can see that the shares did bounce from the $140 area but the recovery was short-lived. A bearish dead or death cross of the 50-day and 200-day moving averages can be seen at the beginning of June. The slope of the 50-day moving average line is negative and the 200-day moving average line is cresting.
The On-Balance-Volume (OBV) line shows weakness from early December but it has not made its own new low for the move down to confirm the decline. This is a bullish divergence for now and I am not sure whether it will produce a rebound. The trend-following Moving Average Convergence Divergence (MACD) oscillator is in a bearish alignment below the zero line.
In the weekly Japanese candlestick chart of AAPL, below, we see a weakening picture. Prices have broken below the 40-week moving average line for the second time in the past three years. This break of this moving average is longer than the one in early 2020 and the slope of the average line is about to go negative.
The weekly OBV line shows weakness the past four months as traders have become more aggressive sellers. The MACD oscillator is bearish for the first time in the past three years.
In this daily Point and Figure chart of AAPL, below, we can see a potential downside price target in the $115 area.
In this weekly Point and Figure chart of AAPL, below, we see that the software is projecting a tentative price objective in the $86 area.
Bottom-line strategy: AAPL is holding (so far) its opening low Monday. This is a short-term positive but it is several hours until the close of trading. Just maybe AAPL can recover and maybe the broader market too, but the bigger picture over the next several months remains grim.
I'm constantly looking for opportunities in this overvalued market.
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