Apple AAPL Trading into Overlapping Resistance Target

Aug 6, 2013: 10:49 AM CST

After a stellar rally from the recent lows – and a ’rounded reversal pattern’ – Apple (AAPL) shares have achieved a confluence upside price target which now becomes the focal point of short-term trading strategies for the stock.

Let’s take a look at what indicators overlap at the current levels and the game-plan created from this test of the new key price inflection level.

We’ll start with the Weekly Chart:

AAPL Apple Stock Weekly Chart Resistance moving averages

A simple weekly chart shows a support-rally off the rising 200 week Simple Moving Average (red) through 2013 which has taken price initially to the falling 20 week Exponential Moving Average (green) and now the 50 week EMA (blue).

The falling (or currently flat-lining) 50 week EMA rests near $474.50 which draws our attention on the Weekly Frame.

Let’s drop to the Daily Chart for another reason why $474.50 is important from an indicator standpoint:

AAPL Apple Daily Chart 200 day SMA Moving Average confluence

The falling 200 day Simple Moving Average (SMA – red) also intersects price at the $474.50 price level which is also reflected in a horizontal trendline from the prior swing highs near the $466/$470 price level (2013).

It’s this level that will form the foundation for current trading strategies for Apple shares – it is a confluence resistance target, meaning buyers may take profits (sell) into the price and moving average confluence (multiple timeframes) and aggressive short-sellers may step up to short shares into resistance.

As traders, our job is NOT to predict the future, but to spot low-risk opportunities (particularly at visual inflection points) and manage open positions in real-time as new information appears each day on the price chart.

For now, a key “IF/THEN” inflection resistance occurs into the current $475 region where a further breakout suggests that price will overcome the logical selling pressure into resistance, leading to a ‘breakout’ or impulse trade targeting $500 or even the prior gap fill into $520 per share.

Of course, we’ll be on guard and watching for any additional selling pressure that develops should price stall and continue moving down “away from” the current indicator/price confluence level.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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3 Comments

3 Responses to “Apple AAPL Trading into Overlapping Resistance Target”

  1. An August Breakout and Trend Reversal for Apple AAPL | Afraid to Trade.com Blog Says:

    […] my prior August update for Apple (Apple Trades into Overlapping Resistance Target), I highlighted the confluence into the $475 area as the critical game-planning price level for an […]

  2. An August Breakout and Trend Reversal for Apple AAPL Says:

    […] my prior August update for Apple (Apple Trades into Overlapping Resistance Target), I highlighted the confluence into the $475 area as the critical game-planning price level for an […]

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    Apple AAPL Trading into Overlapping Resistance Target | Afraid to Trade.com Blog…