A Quick Look at AAPL and GOOG Daily Charts

Aug 27, 2008: 11:17 AM CST

Apple Inc (AAPL) and Google (GOOG) are telling a different story on their respective daily charts – AAPL sits at support on a potential buy signal while GOOG has fallen beneath resistance on a potential sell signal nearing possible support.  Let’s take a quick look to see if we can make any sense of this.

Apple Inc (AAPL) Daily:

After falling from highs near $192 per share since May, Apple has mounted an impressive recovery so far in August.  Price made a new momentum high (though not as high as the previous May peak, which isn’t a big concern) and is now retracing a portion of that move.

Price is forming a possible bull flag into moving average support, which can set up a powerful buy signal to target a potential ‘measured move’ up should the support at roughly $170 per share hold.

Also, if you take a small Fibonacci retracement grid of the $152 low to the $180 high (most recent August swing) then the 38.2% retracement comes in almost exactly at $170 per share – sometimes it’s eerie how many forms of analysis converge at a similar price point.  The 20 week EMA is also $168.65, which is not shown on the chart.

Notice that Apple is experiencing the same volume decline trend the broader indexes are showing – it’s perhaps a seasonal component of vacation or lack of deep partcipation.

While Apple is showing strong potential support at $170 with the potential bull flag pattern forming, Google has absolutely gone the opposite direction!  Let’s look at its daily chart.

Google (GOOG) Daily:

While these stocks often trade similarly, Google has experienced weakness recently and has found resistance about the $510 per share level (which was prior support, and corresponds with the 50 day EMA).

Price has inflected downwards from this level and is now beneath all key moving averages, but it’s important to note that a potential support zone simply from the previous gap (due to earnings) comes in around $455 per share.  The next weekly MA support is the 200 week SMA at roughly $220 per share.

Google has experienced low relative volume throughout August.

It will be interesting to see how Apple defends key support beneath it and if it holds, so we’re at an inflection point with that stock so let’s continue to watch these developments and how they might affect the NASDAQ index as a whole.

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