Chart of the Day: Apple's Tumble Could Signal a Fresh Trading Opportunity
Stock gets hit this week after report about delay in foldable phone, but earnings are now coming up.
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We'll take a look at Apple (AAPL) again today as we believe the move down on Tuesday should be viewed as an opportunity. Apparently a report in Japan said that the foldable phone that Apple is working on may be delayed. The stock took a massive hit, down nearly 10% at one point but did manage to rally back to cut those losses in half. Following the massive market surge on Wednesday, Apple regained all of those losses from the prior day, in typical Apple fashion.
But what alerted us was the sharp downward move in moderate volume (see the the chart), tagging the lower end of the range and then attracting buyers relentlessly. That is something to keep in mind when the Apple falls from the tree. You can use the pullbacks in AAPL to pick up more shares.
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As for the chart, the stock continues to find good support in the $240-250 range. Moving average convergence divergence has now turned up for a buy signal and stochastics (momentum) are overbought, we'll see if Apple can build on it. But resistance is right near the close yesterday at $260, which has been a tough level for Apple to penetrate. Further, the candles remain pink/purple, which is bearish on the GoNoGo composite of indicators at the top of the chart.
The Relative Strength has improved significantly, with higher-highs and higher-lows.
Earnings come later in the month and may be the catalyst to move the stock higher. We like Apple in the Pro Portfolio and rate it a "Two," or stockpile on pullbacks.
At the time of publication, TheStreet Pro Portfolio was long AAPL.
