What if Apple Holds This Level?
Megacap technology stocks like Apple have dragged on the market amid disruptions in China. But what if the iPhone giant manages to bounce? Could it give the bigger indexes a boost?
The main pattern on today’s chart is the $140 level. This price first had importance on November 8, when AAPL first tried to rebound from its China-related weakness. It was resistance that day, but provided support two sessions later (after November 10’s lower-than-expected consumer inflation report).
AAPL proceeded to jump as high as $153.59 the following week. It then hit the falling trendline along the highs of August and October. Prices eased back to the downside, only to bounce at $140 last week and again this week.
During that time investors have endured a barrage of negativity as firms like Morgan Stanley and Credit Suisse cut iPhone production estimates. That may create an environment where lots of bad news is priced in, with the potential for relief rallies if conditions improve.
Price action is also squeezing in a potentially important way because the falling trendline and support at $140 create a narrowing triangle. Traders may watch for AAPL to break out of this pattern either to the upside or downside.
Bollinger Bandwidth shows how the range is tightening. It only adds to the potential drama into the big events next week like consumer prices on Tuesday and the Federal Reserve meeting on Wednesday.
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This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
The main pattern on today’s chart is the $140 level. This price first had importance on November 8, when AAPL first tried to rebound from its China-related weakness. It was resistance that day, but provided support two sessions later (after November 10’s lower-than-expected consumer inflation report).
AAPL proceeded to jump as high as $153.59 the following week. It then hit the falling trendline along the highs of August and October. Prices eased back to the downside, only to bounce at $140 last week and again this week.
During that time investors have endured a barrage of negativity as firms like Morgan Stanley and Credit Suisse cut iPhone production estimates. That may create an environment where lots of bad news is priced in, with the potential for relief rallies if conditions improve.
Price action is also squeezing in a potentially important way because the falling trendline and support at $140 create a narrowing triangle. Traders may watch for AAPL to break out of this pattern either to the upside or downside.
Bollinger Bandwidth shows how the range is tightening. It only adds to the potential drama into the big events next week like consumer prices on Tuesday and the Federal Reserve meeting on Wednesday.
TradeStation has, for decades, advanced the trading industry, providing access to stocks, options, futures and cryptocurrencies. See our Overview for more.
Important Information
TradeStation Securities, Inc., TradeStation Crypto, Inc., and TradeStation Technologies, Inc. are each wholly owned subsidiaries of TradeStation Group, Inc., all operating, and providing products and services, under the TradeStation brand and trademark. You Can Trade, Inc. is also a wholly owned subsidiary of TradeStation Group, Inc., operating under its own brand and trademarks. TradeStation Crypto, Inc. offers to self-directed investors and traders cryptocurrency brokerage services. It is neither licensed with the SEC or the CFTC nor is it a Member of NFA. When applying for, or purchasing, accounts, subscriptions, products, and services, it is important that you know which company you will be dealing with. Please click here for further important information explaining what this means.
This content is for informational and educational purposes only. This is not a recommendation regarding any investment or investment strategy. Any opinions expressed herein are those of the author and do not represent the views or opinions of TradeStation or any of its affiliates.
Investing involves risks. Past performance, whether actual or indicated by historical tests of strategies, is no guarantee of future performance or success. There is a possibility that you may sustain a loss equal to or greater than your entire investment regardless of which asset class you trade (equities, options, futures, or digital assets); therefore, you should not invest or risk money that you cannot afford to lose. Before trading any asset class, first read the relevant risk disclosure statements on the Important Documents page, found here: https://www.tradestation.com/important-information.
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