Stock of the day: Apple

This Wednesday, we turn our attention to Apple, one of the most popular companies to trade on the market. The last time we discussed Apple was at the end of March and back then, we were bullish, saying:

“Currently, the closest aim in the mid-term is the yellow resistance around 177 USD. That’s in the mid-term though, as in the short-term we may experience a small bearish correction. Why? Because since March 15^th, we’ve had almost only bullish days. The price has climbed significantly and some kind of take profit action would simply be healthy for the overall up trend. To sum up, the general sentiment is positive and in the mid and long-term, we should see Apple trading higher.”

That was a great call in the mid-term. The price went from 170 USD to 177USD as mentioned in our analysis. It went even slightly higher at the end of the month, reaching a local top on 179 USD.

That was it though and from that place, the price reversed. From a technical point of view, the reversal allowed the creation of the right shoulder of the H&S formation – a bad sign for buyers.

Currently, Apple is in an absolutely crucial support or maybe combination of few crucial supports. The first one is the long-term up trendline (black). The second one is the red neckline, and the third one is the horizontal area around 155 USD (green). The price is fighting with the last two at the moment and so far, the long-term up trendline remains intact.

The sell signal on Apple will be triggered when Apple closes a day below the black up trendline. The chances for that happening with the current global sentiment are quite high.