Technical Analysis – Apple stock fails to reach 6-month high; prints warning candles

Anthony Charalambous, XM Investment Research Desk

Apple’s stock lost steam in the last sessions, after a nearly two-month rally from the low of 170.17 on June 3. The pair formed a hanging man formation followed by a close lower and then a shooting star. The bulls seem to have lost control and momentum indicators also warn of a possible short-term down move.

Although the price is above the Ichimoku cloud and simple moving averages (SMAs), momentum has paused as the Ichimoku averages have moved sideways, while the MACD has flattened with its trigger in the positive zone. The RSI points up indicating a pickup, and the ADX suggests a strong trend is in place.

If upside momentum picks up and buyers take the reins, the price could move to test the six-month high of 215.20, where a successful break may bring the resistance of 222.30 into play.

On the downside, if a short-term side move unfolds and the price fails to move above 209.62, support may come from the Tenkan-sen around 206 and the Kinjun-sen, coupled with swing low of 202.25. Further south, a break of the 200.40 level, which is the 23.6% Fibo of the up move from 170.17 to 209.62, may turn the focus to the 40-SMA and the support zone of 197.60.

Overall, a general bullish bias exists in the medium-term, but a break above the high of 215.20 is required to confirm a new rally up, otherwise a break below the low of 170.17 is needed to shift the short- and medium-term to bearish.