Apple's Blue-Sky Run Killed When Expensive New Product Is Unveiled: The Bull, Bear Case

Apple, Inc AAPL reached a new all-time high on Monday during its Worldwide Developers Conference.

Benzinga predicted this scenario.

After reaching the blue-sky high of $184.95, the stock ran into a group of sellers who caused the stock to dip back into the channel pattern, which Apple has been trading in since March 22.

The rejection from the new all-time high came after Apple revealed the cost of its Apple Vision Pro.

Apple’s move lower also caused the S&P 500 to sell off from its high-of-day, to print a shooting star candlestick on the daily chart. The candlestick suggests lower prices could be in the cards for Tuesday.

When a shooting star candlestick prints during an uptrend, it can signal the local top has occurred and a retracement is likely to take place. The candlestick is a lagging indicator, however, requiring the next candlestick on the time frame being studied to print for confirmation.

If the candlestick is recognized, however, and the index trades lower of the next few days, volatility in the stock market could increase. Traders wishing to trade the volatility in the stock market can use MIAX’s SPIKES Volatility products. The products, which are traded on SPIKES Volatility Index SPIKE, track expected volatility in the SPDR S&P 500 over the next 30 days.

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The Apple Chart: Apple broke through its previous all-time high of $182.94 but rejected the high-of-day and dropped back into the rising channel, bouncing up slightly off the median line of the formation. The stock ended Monday’s session by almost printing a bearish engulfing candlestick, which suggests lower prices could come Tuesday.

• The pullback is a positive sign for the bulls if the stock can remain in an uptrend. Apple’s relative strength index reached 73% on Friday, which indicated a retracement lower was a likely scenario.
• Apple’s most recent higher low within its uptrend was formed on May 24 at $170.52 and the most recent higher high was printed at the $176.39 mark on May 19. As long as the stock forms a reversal candlestick above about $171, such as a doji or hammer candlestick, the uptrend is likely to remain intact.
• Bearish traders want to see Apple eventually break down from the rising channel formation on higher-than-average volume, which could suggest a longer-term downtrend is on the horizon.
• Apple has resistance above at $182.94 and $184.95 and support below at $177.71 and $174.33.