Market Overview

2 Charts To Make Sense Of Apple's Strong Uptrend

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Eagle Bay Capital founder and Market Technician JC Parets tracks the performance of the Dow 30, and recently analyzed Apple Inc. (NASDAQ: AAPL).

Weekly Chart

Structurally, the shares are in a sturdy uptrend. In February the stock hit Eagle Bay’s upside target close to $129, which represents the 161.8 percent Fibonacci extension of the entire 2012-2013 decline.

“In addition, momentum is putting in a bearish divergence at these new highs,” the firm’s Dow 30 report explains. “This continues to suggest taking profits until it digests these gains further and approaching this more from a tactical perspective” (see daily chart below).

With an upward-trending 200 week moving average and relative strength in a strong slope upwards, Parets sees little reason to be short, and says he would continue to wait for more information before acting on Apple again.

Daily Chart

A look at the daily chart (for last Wednesday) provides a more tactical view. Short-term, Apple reached Eagle Bay’s upside target in February, near $129 (based on both the weekly price target and the 161.8 percent Fibonacci extension of the November-January decline). The company continues to struggle with this level and, until more data and/or consolidation of these gains can be seen, Parets thinks there is not much to do.

“With an upward sloping 200 day moving average and momentum in a bullish range I see little reason to short this,” he said. “We do not want to own AAPL if prices are below the 3/19 highs.”

Posted-In: Eagle Bay Eagle Bay Capital JC ParetsLong Ideas Technicals Trading Ideas

 

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