Apple Inc.’s stock has rallied enough the past couple of weeks to break through the resistance that has been dragging the stock down the past three months.
The ending of the short-term downtrend would then suggest the technology behemoth’s stock has resumed the 2023 that carried it all-time highs.
The stock
AAPL,
rose 1.6% toward a two-month high in afternoon trading Tuesday. It has soared 9.1% over the past eight sessions, the best eight-day stretch for the stock in a year.
That confirms that Monday’s rise above the downward sloping trendline, that started at the July 31 record close of $196.45 and connected the Sept. 5 close of $189.70 and the Nov. 2 close of $177.57, reversed the short-term downtrend.
Read: Apple’s stock falls as earnings show another revenue decline, China pressure.
One of the key tenets of the Dow Theory of market analysis, which has remained relevant on Wall Street for more than a century, is that a trend remains in effect until it gives a clear signal that it has reversed.
And the easiest, best way to track a trend is to draw a trendline, with at least three connecting points, while the best reversal signal is a clear break of the trendline. Read more about the trading maxim, “the trend is your friend.”
The reversal of the three-month downtrend suggests that, based on the chart watchers axiom that there’s always a bigger trend, the previous longer-term uptrend that started in early-January is ready to resume.
Also read: Apple’s stock uptrend is no longer its friend.
That doesn’t mean Apple’s stock is now cleared for take off back to record territory.
It will have to contend with a likely resistance zone, bordered by the Sept. 5 closing high of $189.70 and the point where the previous uptrend line broke, around $192.90.
Downside support begins at the recent breakout point, around $177.60.
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