Apple Turns the Corner

Apr 3, 2008: 8:17 PM CST

Apple Inc (AAPL) has completed a mighty technical feat recently – it has stopped its downtrend and now is showing signs of vibrant life.

Notice the “U-Turn” or the “Saucer or Rounded” bottom the stock has formed. After falling from $200 to $115 two months later, AAPL has recovered up to an intraday high near $155 today.

Price has completed a significant technical (analysis) feat by closing so strongly above both the 20 and 50 period moving averages. These averages are now expected to provide support should price retrace back to them, and will likely provide a floor for bulls to build upon.

Also, momentum has been increasing into the Saucer Bottom, further adding bullish ‘fuel’ to this stock. Price is now testing the daily 200 period moving average. In fact, price breached this level and closed above it today!

I would suggest that a slight retracement is possible, but the daily trend has now changed to up, and has done so in a relatively solid and smooth method. I’ve heard traders say “Apple is a different kind of company/stock” and perhaps they’re right.

Let’s take a look at the weekly chart:

The “U-Turn” buy becomes a little more evident here, as well as the strength of the bulls in pushing price higher. Price has now breached and (likely as of Friday) closed above the key 20 and 50 period moving average, further adding new potential support to the upward price action.

There is a rare gap on the weekly chart near the $160 level which appears to be a soon-to-be achieved price target.

To look back in time on some of my earlier recent posts on Apple, consider:

Apple – Fibonacci and a Secret Weapon
A Quick Look at Apple (March 11, 2008, where I first pointed out the rounded bottom pattern)

 

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