Apple continued to move lower once again last week, closing on Friday at $604 following an initial rally on Monday which saw the stock move back above $630 with a strong surge higher, only to see this promptly reversed on Tuesday as the bearish momentum took hold once again. This bearish picture for the stock was first signalled in late September with our trading indicator transitioning from green to red, and confirmed almost immediately with the daily trend also turning red. The three day chart has also reflected the bearish picture, with the trend here also bearish, and with sustained selling volumes in both timeframes we can expect to see Apple decline further in the short term. The indicator has already delivered several entry signals to the short side, the first of these was in late September and duly confirmed with a conservative trend signal in mid October, with a further conservative volume signal arriving last week. Indeed the most recent signal was validated on Wednesday with a grey re-entry signal.
With a series of lower highs and lower lows on the daily chart, all well defined by the pivots, the outlook remains bearish, and from a technical perspective, the next level of potential support is now waiting in the $575 to $580 region. If this is breached then we could see a deeper move in the medium term to test the low of mid May in the $520 region.
By Anna Coulling