Apple Leads The Market Higher After Recently Lagging: Here's What's Happening

Apple, Inc AAPL was popping up over 1% on Monday, leading the S&P 500 slightly higher.

The tech giant has lagged the broad market index during the last two most recent rebounds, unlike during the last short-term bully cycle, which took place between June 17 and Aug. 17. During that time frame, Apple led the S&P 500 and showed comparative strength to the index.

On Monday, the S&P 500 was attempting to break up through a long-term descending trendline that’s been holding the SPDR S&P 500 SPY down since Jan. 4, 2022, and which Benzinga pointed out most recently on Thursday.

If the SPY is able to close above the trendline and trade above the area for a few days, it could signal a larger reversal to the upside. If that happens, Apple is likely to continue higher within its uptrend, which could eventually bring the stock up to the 200-day simple moving average (SMA).

The 200-day SMA is an important bellwether. Technical traders and investors consider a stock trading above the level on the daily chart to be in a bull cycle, whereas a stock trading under the 200-day SMA is considered to be in a bear cycle.

The 50-day SMA also plays an important role in technical analysis, especially when paired with the 200-day. When the 50-day SMA crosses below the 200-day SMA, a death cross occurs, whereas when the 50-day SMA crosses above the 200-day, a bullish golden cross takes place.

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The Apple Chart: Although the S&P 500 is trading above the 200-day SMA, Apple remains about 6% below the 200-day. On Monday, Apple regained the 50-day SMA as support, however, which will give some bullish traders more confidence going forward.

• Apple reversed into an uptrend on Jan. 6, after printing a quadruple bottom pattern near the $125 mark. The stock’s most recent higher low was formed on Jan. 19 at $133.77 and the most recent confirmed higher high was printed at the $138.61 level the day prior.
• On Monday, Apple was surging over the Jan. 19 high-of-day, but hasn’t yet indicated the next temporary top has occurred. Eventually, Apple will print a reversal candlestick, such as a doji or shooting star candlestick, which could signal a retracement to print a low is on the horizon.
• If Apple closes the trading session near its high-of-day price, the stock will print a bullish kicker candlestick, which could indicate higher prices will come again on Tuesday. If the stock runs into sellers who cause the stock to close the trading session with a significant upper wick, it could indicate the next higher high is in and Apple will trade lower.
• Apple has resistance above at $143.51 and $146.41 and support below at $137.33 and $134.35.

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