Saturday, August 5, 2017

AAPL Apple Monthly Chart; Record High 159.75; Multi-Year Top At Hand; Negative Divergence; Overbot; Upper Band Violation; Price Extended to Upside

Keystone has been posting the Apple charts monitoring when the multi-year top will occur and now is the time, say anytime over the next couple-three months. The snare drums are rattling as Apple walks to the gallows. It was a great, wonderful and long party but alas, all parties have to come to an end. Wall Street analysts continue to cheerlead for Apple and expect higher and higher stock prices ahead but they are drunk on the Apple wine and no longer thinking coherently. The monthly chart says the party is over.

The iPhone 8, or whatever it may be called (Apple may cal lit iPhone X (think Roman Numeral X) or iPhone Pro or something else to commemorate the 10-year anniversary of the iPhone), is touted as the key to more new highs ahead. Maybe it is, but the chart above says no. The only thing that can change the negativity on the chart is if the MACD  line comes up for a higher high compared to 2015; this will delay the multi-year high by another couple months or so.

But the call now is that Apple is cooked. CEO Cook is baked. The top is very likely a multi-year top which makes the situation very important. Price makes a higher high after the earnings report last week, a new all-time high at 159.75. Apple enthusiasts are dancing in the streets. Another couple weeks should be provided to note the full impact of the earnings release.

The red lines show the negative divergence occurring across all indicators from 2015 to now. Price prints the all-time high but the indicators are out of juice. Price floats higher on fumes. Note the MACD line is long and strong over the last few months, ditto the money flow, and these two will try to create another jog move higher such as down August, up September then down October but price may simply begin lower at anytime from here.The overbot RSI is agreeable to a pullback. 

Price is well extended above the moving average lines and requires a mean reversion lower. Just think, AAPL price will someday well into the future print below the long-term 200-week MA that is currently down at 42 (perhaps about 5 to 10 years from now AAPL will be in the 50 to 100 range). Note how the volume has trended lower ever since the 2008-2009 highs.

AAPL has tagged the upper standard deviation band so in this monthly time frame the middle band at 119 is in play; this would be a target that has potential to print this year.  A drop from 156 to 119 would be a -24% drop, or that would actually be called a crash, into a bear market.

The ADX line is interesting you can see the very strong trend higher for price from 2004-2008 (blue box). Then the financial crisis hit and all stocks dropped. AAPL then rallied again and it was a strong trend higher in 2011-2012 but that petered out. The latest rally was a strong trend for a few months in 2015 just as price topped out but that petered out. Despite the new record high in Apple, the ADX is not impressed down at 28. The price action for the last few months is not a strong trend higher.

Apple bulls need the ADX up in that blue box in the right margin next year and all will be fine. Apple bears need the ADX to stumble sideways. If Apple price rolls over in force watch the ADX closely since if it then rises above 30, 35, and higher it will prove that the selling action is in a strong downside trend. That will create Apple angst and perhaps even panic. By then, anyone that stayed in Apple would already be holding their heads in their hands.

The chart says a major top for Apple is printing currently. When she rolls over at anytime during the days and weeks ahead, these prices may never be seen again. It is wise to exit the stock and bid it farewell. If it is tough for you to breakup with pretty Apple, scale yourself out by selling one-third now, one-third in 2 or 3 weeks and then the final third 2 or 3 weeks after that. Apple is mainly just a smartphone company and everybody and his bro are making smartphones nowadays. The late adopters buying smartphones are far more price conscience than early adopters. Apple's strong suit is all the loyal groupies that help support the company.

If you listen real close, you can hear Bob Hope singing in the background one of his most notable tunes, "Thanks for the Memory." Thanks for the memory Apple, but now is the time to give you the old soft shoe out the door. A drop in Apple will have a serious negative impact on the stock market especially the Dow and Nasdaq indexes. 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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