AAPL Apple Monthly Chart; Overbot; Rising Wedge; Negative Divergence Developing; Upper Band Violation; Price Extended

As previously mentioned, Facebook is likely the first of the FAANG stocks that rolls over this year based on the monthly charts. The next will be Apple, then Google, then Amazon and Netflix as the year plays out; FB, AAPL, GOOGL, AMZN and NFLX, respectively. 

Taking a look at AAPL monthly chart,the RSI and stochastics are overbot agreeable to a pullback. The red rising wedge indicates trouble ahead. The red lines show negative divergence in play for all indicators sans the MACD line which is typically the last indicator to roll over. The top is not in for AAPL until the MACD line goes neggie d. This can happen after a jog move where price drops for a month or so, then comes back up to the current highs again, say about 2 months out in March, and at that time the MACD may roll over and slope negatively creating negative divergence and identifying THE top in Apple.

It is a monthly chart so the tops are multi-month and multi-year very long term. Thus, the prices you see now in Apple, say now through May, will likely not be seen again for a few years.

Price has violated the upper standard deviation boundary so the middle band at 136.38, also the 20-mth MA, and rising, is on the table for this year. Price is extended above the moving average lines requiring a mean reversion lower.

The ADX and purple boxes show how the collapse in the 2008 financial crisis was a strong trend lower but the Federal Reserve stepped in to save the stock market and protect the wealthy class in March 2009. Apple took off like a rocket as the Keynesian money flooded into the streets. The world remains awash in central banker liquidity all these years later.

The upside trend was strong in 2011 into 2013 but then it petered out. Apple rallies aain in 2014 into 2015 and the trend was just starting to be proven as a strong trend but instead price collapsed due to the neggie d. The ADX is trying to prove that the upside trend is strong again but is struggling. Note for the peaks the ADX is lower each time. The strong trend higher in AAPL stock peaked in 2012 and, although still strong, the trend has weakened over the last 6 years.

The expectation is for Apple to print a long-term multi-month and year high at anytime between now and May with March-April the best candidate for the top. When price comes up for a matching or higher high and you see that MACD line roll over, that will be the exact top-tick in Apple stock. AAPL is a powerful stock so you have to think long and hard about shorting it. Price should see weakness in the near-term but as stated AAPL will likely come back up for another high say in late February or March.

So there is no reason to own it long. If you were on the long upside ride you can slowly scale-out as AAPL top ticks over the next couple months or so. A short can be placed when you see the MACD goes neggie d since from that point forward will be lots of downside for weeks, months and potentially a few years to come. Keystone can update the progress of the chart as time proceeds if the readers want to see the updates. 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.