Technical Analysis – Apple tumbles and hits 135; Will it break lower?

Apple’s stock had a free-fall ride last week, eventually finding some buy orders near the key support territory of 135.00 on Friday. Yesterday, the stock rebounded somewhat but with a tentative downtrend line and all the plotted moving averages well above the current price level, the outlook remains gloomy.

Both the RSI and the MACD are detecting downside speed and corroborate the notion of another round of selling in the foreseeable future. The former is lying below its equilibrium 50 line, while the latter is running below both its zero and trigger lines, pointing down.

Even if yesterday’s rebound extends for a while longer, the bears could well recharge from near the 147.50 zone or the aforementioned downward sloping line. Another round of selling from near those zones may result in another test at the 135.00 territory, the break of which could aim for the 129.00 area, marked as support by the low of June 16. If there are no buyers to be found there either, then the decline may extend towards the low of May 12, 2021, at around 122.00.

On the upside, the bearish case may be dismissed upon a strong rebound above the high of October 20 at 157.50. This will confirm a higher high, as well as the break above the tentative downtrend line. Investors may get encouraged to climb towards the peak of September 12 at around 164.00, the break of which may allow extensions towards the 171.00 area, marked as resistance by the high of August 26.

To sup up, Apple fell sharply last week but hit support near the key territory of 135.00. With that in mind, a break lower may be needed to confirm that the bears are still in charge.


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