5 Charts That Explain Why Apple Is A Hold

In a report rolled out Wednesday, eResearch Corporation looked into five charts that demonstrate that shares of Apple Inc. AAPL are currently range-bound. The analysts see no compelling reason to either buy or to sell the stock, and thus rates it a Hold.

CHART 1: THREE-YEAR

A long-term up-trend line (light Green) that began in June 2013 is a far from being tested.

The resistance (featured in subsequent charts) is represented by the shorter up-trend line (dark Green) that began in April 2014.

CHART 2: ONE-YEAR

In this chart, the aforementioned dark green line stands well below the current share price, at about $122.

The red resistance line stands close to $134. “The stock is in a holding pattern, captive in this ascending triangle,” the report explained.

CHART 3: SIX-MONTHS

In the third chart, the resistance line is the same, but the uptrend line is different. In this case, the formation looks pretty much like a rectangle, rather than like an ascending triangle. “Both formations can be a ‘continuation’ pattern or a ‘change-of-direction’ pattern,” the experts said. “At this point, the stock is dab-smack in the middle and not forecasting nor tipping its hand at either a break-out or a break-down.”

CHART 4: ONE-YEAR (with Moving Averages)

This chart is very similar to Chart 2, but includes the 50-day, 100-day and the 200-day Moving Averages.

On Wednesday, the stock “bounced off both its 50-day and 100-day Moving Averages. Breaking below them (we have to wait for the closing price today to confirm all is well) would be cause for some concern.”

However, this preoccupation would only turn into “a clarion call for selling action” if the stock broke below its 200-day moving average, around $118.

CHART 5: SIX-MONTHS (with Moving Averages)

Same as in the graph overhead, this one includes moving averages. Wednesday trading shows the break-out from the two moving averages.

Conclusion

After taking a look at the five charts featured above, analysts at eResearch conclude there is nothing to do with Apple’s stock but wait. If it managed to break out above resistance of roughly $134, “then the NASDAQ can be expected to churn to new all-time highs.”