Technical Analysis – Apple stock falls to 6-week lows after breaking bullish channel

Christina Parthenidou, XM Investment Research Desk

Apple stock plunged to a six-week low of 184.60 after breaking the almost five-month old bullish channel to the downside.

The risk remains negative in the four-hour chart as the price has also dropped well below the Ichimoku cloud, while the bearish crossover between the 20- and the 50-period simple moving averages (SMA) suggests the pair will continue to trend down.

In momentum indicators, the MACD is discouraging as well, deepening in negative zone and under its red signal line. Yet with the RSI fluctuating near its 30 oversold level, upside corrections cannot be ruled out.

Monday’s trough of 184.60 could keep the bears busy If negative momentum resumes. Beating that wall, the spotlight will next turn to the 181 level, while lower, another battle could start around the 176 mark.

Alternatively, a rally above the cloud and the 23.6% Fibonacci of 204.57 of the upleg from 170.14 to 215.21 would return confidence to the five-month old upward pattern. But on the way up, the bulls would first need to overcome the 50% and the 38.2% Fibonacci levels of 192.62 and 197.95 respectively.

In brief, Apple stock is trading bearish in the short-term time frame.