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  1. Home
  2. / Investing

Will Apple Prove a Leader? Wait and See

Watch whether AAPL declines less than the S&P 500 and if we can spot a bullish candle pattern.
By BRUCE KAMICH
Feb 24, 2020 | 01:49 PM EST
Stocks quotes in this article: AAPL

Into a market peak and during the subsequent decline, astute traders are looking for clues. There are always stocks, or industries or even sectors that lead and others that typically lag.

Which ones are safe haven plays? Which ones are diversified and which ones are more insulated from global pressures?

Technical analysts do things like this too -- like finding which stocks are showing us superior relative strength. Or, looking for ones that have broken the 195-day moving average line? (Yes, trying be be one week smarter than waiting for the 200-day moving average.) You get the picture, I am sure. I consider Apple (AAPL) a leadership company and stock and I would assume many other market watchers do, too. Let's look at a couple charts of AAPL to we what we can glean. 

In this daily Japanese candlestick chart of AAPL, below, we can see that prices gapped lower Monday. Prices have improved from their weakest point and are actually above the open. We do not know how prices will close, but this is the information we have to work with for now. Trading volume is not particularly heavy, but again we have more time until the closing bell. The On-Balance-Volume (OBV) line has been weakening since late January and the 12-day price momentum study shows weakness in February vs. January.  

 
  
In this daily Point and Figure chart of AAPL, below, we see that the software has projected a potential downside price target in the $255 area. Potentially more pain ahead. 
 
 
Bottom line strategy: Many analysts will be using various oversold/overbought indicators to suggest that AAPL and other stocks are buys, but I am not so sure that is the way to be successful. I think we should be watching to see if AAPL declines less than the S&P 500 (right now the S&P 500 is down 3.07% and AAPL is off around 4.37%) and if we can spot a bullish candle pattern with confirmation the next session. Exhale slowly.
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TAGS: Investing | Technical Analysis | Technology | Technology Hardware & Equipment | Telecommunications | Television Production/Distribution | Consumer Discretionary | Telecom Services

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