Apple at New Highs; Continues Ahead of the Curve

Apple Inc

has been the backbone of the NASDAQ, as it has gained nearly 37% in 2012. Last week's announcement describing the “New iPad” showed consumers and investors that Apple continues to remain ahead of the curve and will likely have robust results with their new product. Apple stock price surged after a brief pause last week helped by Jefferies bumping its target price on the stock to $699. The move is likely to continue to generate solid momentum as the price continues to climb. During the middle of last week, the stock tested the 20-day moving average as support, but quickly bounced higher taking out the recent highs on Monday. Resistance is seen near $600, which would be a new psychological barrier. The 10-day moving average is now considered short-term support currently seen near $540. Surprisingly a divergence has occurred on the MACD (moving average convergence divergence index). The divergence that was created was a nice high reached on Monday, which occurred as the MACD reflected an index level of -1.09. At the same time, the MACD created a buy signal in which the spread (the 26-day moving average minus the 12-day moving average) crossed above the 9-day moving average of the spread. The RSI (relative strength index) remains in overbought territory. The RSI has been in overbought territory since the beginning of February reaching a print as high as 90, which is severely overbought. With Apple stock only 12 times forward earnings, there is likely going to be continued interest in the stock. Volume on the stock has remained robust as volume printed above the 50-day moving average continuously during the past 6-weeks. Price action has remained at the high end of the Bollinger band high, as the bands expands which is a reflecting of continued momentum.