AAPL Apple Monthly Chart

AAPL has gone parabolic. Ever since the Federal Reserve and other central bankers started the money-printing party in 2009, a decade ago, stocks have enjoyed huge gains. In fact all asset classes continue higher into bubble territories including stocks, bonds, art, real estate, collectibles, antique cars, vineyards, etc... The central bankers are sick pups performing the bidding of the wealthy elite class that own large stock portfolios.

Everyone and his bro are touting how great a company Apple is and ran by a genius such as Tim Cook. Analysts say the services division will make boat loads of money. Strategists proclaim that China sales are robust. They say Apple Watch is flying off the shelves and other tall tales. MS is out with a note this morning touting Apple TV. All these cheerleaders are pumping and dumping. Joe Sucka cannot buy AAPL and other FAANG stocks fast enough. The sharp-dressed man (makes you think of ZZ Top; take it away boys) on television says you can't go wrong if you buy Apple.

In truth, that is all crap. The simple explanation is rotation within FAANG. The selling in FB, AMZN and NFLX sends money into AAPL and GOOGL. The KISS Principle; Keep It Simple Stupid. As the recession descends upon us, many of you will lose your jobs and regret buying that five hundo dollar Apple Watch trinket as you worry about paying rent and buying food. With the ongoing distrust and trade war between China and the US continuing, it is foolish to think Apple sales will hold up in the communist kingdom.

Nonetheless, money runs from King Bezos, Zuck, who is getting grilled on Capitol Hil today, and Netflix, into Sapple driving price parabolic. The daily and weekly charts show the vertical move in AAPL stock; it is a phenomenal move. Investors are buying Cook's cooking. 

Keystone has called each top in Apple due to the neggie d, oversold conditions, rising wedge patterns, upper band violations and required mean reversions. Apple was expected to come back up for another high due to the long and strong MACD on the monthly chart (first week of October 2018 a year ago) so price does print the higher record high. The monthly chart is now in negative divergence across all indicators over the last year. Now there is no reason for Apple to move higher on a long-term basis. There is momentum in the short-term, however, so Apple will likely need 2 or 3 months to top out and roll over. Price rotates within the FAANG stocks with Apple the big victor printing a new all-time high at 242.20.

The maroon lines show the negative divergence remaining in place over the last year and it is substantive. At the same time, however, the green lines show the near-term momentum trade, the parabolic price hike, on the daily and weekly charts. Thus, over the long multi-month time period, the stock is toast, however, in this near-term month-to-month basis, AAPL may be able to bump sideways at these levels for a bit longer, say the remainder of October, November, perhaps some of December. As the overall stock market rolls over for a multi-year lag period, Apple stock will simply be one of the last to roll over.

The purple boxes for the ADX show when the trends higher were strong trends. The prior rally into the Q4 2018 top was a strong trend higher; that disappeared in March of this year and the ADX at 24 says the ongoing parabolic rally is NOT a strong trend higher.

The upper band was violated so the middle band at 192 is on the table going forward as well as the lower band at 145. Price is elevated above the moving averages and desperately needs a mean reversion lower. Keystone does not hold a position in AAPL right now but would not be long. The expectation would be for Apple stock to be at 80-120 a year or two from now. 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.

Note Added Saturday Morning, 10/26/19: AAPL catapults to a record high up +4.3% to 247 on the week. Tim Cook plans a toga party this weekend to celebrate. Apple price is parabolic going straight vertical from 200 to 247, +24%, in only 10 weeks time.