Saturday, January 14, 2017

AAPL Apple Monthly Chart; Strong Multi-Year Trend Higher is Over

Keystone highlighted the prior top in Apple in spring 2015 with the broader market. The overbot conditions, red rising wedge and negative divergence indicated that a pull  back was desperately needed, which occurred, however, at the same time, you knew the MACD line and histogram, remaining long and strong (green lines), would want another high again in price after the pull back, and price keeps floating higher towards that goal printing a potential double top, or 'M' top.

Negative divergence cannot yet exist over the last two-year time frame until price makes a matching or higher high. If that occurs, check all the indicators to see if they remain below the thin red lines, if so, that will be neggie d, and time for a big smack down in price going forward. Do not get caught up in the Apple hype.

The upper standard deviation band (pink) at 125 is in play. Note the bands squeezing in the tightest in years. Price is going to make a big move early this year. Tight bands, however, do not predict direction. The price action over the last couple years has a sideways feel to it.

The ADX drops under 25 during last year. This is a big deal. For many years, as the Federal Reserve keeps pumping the stock market higher with easy money, Apple has enjoyed a strong trend higher. Not anymore. The ADX sagging to 18 verifies that Apple is 'no longer in a strong uptrend'.

The Apple bears would be better off right now if price was actually higher at that 124-128 area since that would lock in the neggie d. Price may actually stumble sideways for a few months. The chart is bearish. The guess would be that Apple is printing a multi-year top right now in early 2017. A positive news announcement of a new product would help maintain price buoyancy. Negative stories will sink the stock faster.

Price may target the 124-128 area but if negative divergence is displayed by all indicators (thin red lines), which is likely, that will identify THE top in Apple stock price. Look at the pitiful volume with the stock.

You do not want to own this stock. If long, it is likely prudent to scale out going forward and just let that money sit on the sidelines in cash. With price at 119, 123-128 is on the table as price prints a multi-year top early this year in this 119-128 range. 2017 likely identifies the last high-flying year for Apple. CEO Cook is standing at a New York City street corner this morning trying to sell Apple Watches left over from the holiday season. Cook is busy arguing with an Apple enthusiast telling him that the ear buds do not look like a cigarette butts in your ear. 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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