Sunday, January 17, 2016

AAPL Apple Daily Chart Oversold Falling Wedge Positive Divergence

The stock market has been bludgeoned led lower by the hot-shot stocks such as Apple. AAPL bounced six days ago but then was flushed down the toilet last week with everything else. For the last bounce, the indicators were positively diverged except for the RSI and MACD that wanted one more price low (red lines), and that price low occurs. Now all the indicators are positively diverged (green lines) so a bounce is on tap. The chart set-up hints that the broad stock market may be poised for a much-awaited relief rally.

Price has violated the lower standard deviation many times over the last month and the door is open to one more touch lower, however, price is not expected to go down to the 94.47. If it does it will likely bounce from there. AAPL would be expected to bounce Tuesday or Wednesday and the rally to have some legs for a few days or week or two. Note how with all the lower band violations price has not yet traveled back to the middle band, the 20-day MA at 103.45, which is unusual and desperately needed. This gives credence to price bouncing right away and start higher to that much needed touch of the middle band. Price is also extended below the moving averages requiring a mean reversion higher.

There are about a dozen stocks that carried the broad stock market up last year and will greatly impact the path ahead, the AGMANHASFUN ("A G-Man Has Fun") acronym stocks need to be monitored going forward (Alphabet, General Electric, Microsoft, Apple, Netflix, Home Depot, Amazon, Starbucks, Facebook, Under Armour and Nike).

Very interestingly, AAPL is the only stock in this bunch that has the positively diverged MACD on the daily chart. UA, NKE, GE, MSFT, NFLX and AMZN are set up the same except for a weak and bleak MACD so these stocks would be expected to bounce a couple days but then come back down for a day or two to take another look at the lows, then bounce for a more sustainable rally in the short term. All seven of these stocks should be on the way higher with a recovery rally by next weekend.

Apple was beaten badly so it makes sense that it will likely lead this batch of AGMANHASFUN stocks higher. HD and GOOGL charts are less enthusiastic for a strong bounce, instead, softness and sideways action may continue. SBUX stock is stumbling sideways. Apple is laying in the alley way beaten up and bleeding, but will rise from the gutter with the help of the possie d. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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