Time to Buy AAPL?

Jul 6, 2008: 1:44 PM CST

Is Apple Inc (AAPL) coming up on a short-term buy signal?  Let’s look at the price structure to see.

Let’s start with the weekly chart:

Price may be finding potential support at the rising 20 week moving average, which could set-up a low risk entry (with a stop possibly beneath the 20 period average or (aggressively) beneath the 50 period average.

Volume has been declining throughout most of 2008, and this could be of concern to bulls, but price still remains above the key averages.

The “doji” candle signifies ”indecision’ and often precede turning points in the market.  This doji was preceded by a retracement swing, and price could turn back up from here if the bulls become aggressive.

The daily structure shows a powerful potential buy signal as well:

Though the most recent downward price action was preceded by a negative momentum divergence (not shown), price appears to be finding support at the rising 200 day moving average.

Price is currently trapped between this potentially strong support zone and the confluence of the 20 and 50 day exponential moving averages, as well as a ‘down’ trend-line from teh June highs.

Also, price has formed a ‘doji’ on the daily chart as well.

In this case, a relatively safe trade might be to place a stop beneath the 200 day moving average and either enter currently (for aggressive positioning) or enter long (buy) when price has overcome the moving average and trendline resistance at the $175 per share level.

Keep a watch on this stock, because strength in technology (and Apple) could mean a little boost to the overall market.

3 Comments

3 Responses to “Time to Buy AAPL?”

  1. beanieville Says:

    Nice chart, but i see it slightly different than you:
    http://beanieville.blogspot.com/2008/07/get-ready-to-short-aapl-technicals.html?disqus_reply=824360#comment-824360

  2. Bob D Says:

    It would be great if you would attach a dollar number when you use things like “200-day moving average” so those of us in a hurry don’t have to figure it out for ourselves by studying the charts. If all you do is put the actual number in parentheses after the ref, ,any of us would very much appreciate it.

  3. Corey Rosenbloom Says:

    Bob,

    That is an excellent suggestion, and one I will begin implementing. I keep the legends off the charts now because they obscure data at times, but I realize the importance of knowing the exact value of the averages. I will turn the legends back on and try to call attention to key levels/dollars when appropriate.

    Thank you.