AAPL Insights

Apr 22, 2008: 9:41 AM CST

Apple Inc (AAPL) completed its buy signal and is running into potential overhead resistance which could temporarily halt the growing up-move in the stock.

The buy signal I highlighted previously worked even better than I anticipated, with price gapping up multiple days to reach the first profit target – the resistance line at $170.

Traders, you may want to consider taking at least some profits at this level and waiting for a clean break above this level before trading higher, but that all depends on your strategy and risk-management parameters.

Also, I do want to highlight a divergence.

The recent move off the February lows has expanded each week on relatively lower volume, which is a technical non-confirmation of higher prices.

Let’s look at this two ways:

1. Higher prices are not attracting new buyers and the rally is suspect or at least due for a deeper retracement

2. The capitulation bottom of early 2008 zapped away all the ‘weak’ holders in a climax reversal, and so this must be considered when addressing ‘relative volume’

In other words, there’s no way to match or exceed climactic volume – this would be the more optimistic approach and the first statement would be pessimistic.

Keep your eye on this stock and let’s continue to watch or trade the exciting emerging developments.

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