A Look At Apple Stock Heading Into The Fed's Rate Decision Wednesday

Zinger Key Points
  • Apple is trading in an inside bar pattern and a rising channel ahead of the Fed's decision on interest rates.
  • If Apple breaks down from the channel, volatility in the stock market may increase.

Apple, Inc AAPL opened slightly higher Tuesday, as the Federal Reserve’s two-day meeting kicks off, where the central bank will decide whether to hike interest rates after applying a pause in June.

As the Fed's decision draws near, trading volume across major indices and individual stocks is expected to diminish as investors hold off on making moves. However, once the decision is announced at 2 p.m. ET on Wednesday, a surge in trading volume is anticipated as the market processes the information.

With Apple being the largest holding within the S&P 500, movements in the stock can pull the index in both directions, and investors will be closely watching the company with the biggest market cap in the market.

When volume enters the stock market after the Fed’s decision, volatility could also increase. Traders wishing to trade the potential volatility have multiple options, including the ConvexityShares Daily 1.5x SPIKES Futures ETF SPKY.

SPKY is a fund that tracks the SPIKES Futures Short-Term Index and measures volatility in broad-based equities, similar to the ProShares Ultra VIX Short Term Futures ETF UVXY, which tracks the movement of the S&P 500 VIX Short-Term Futures Index.

For every 1% daily movement in the SPIKES Futures Short-Term Index, the SPKY fund seeks to move 1.5%, meaning that it’s for short-term trades and should not be held for a long period of time.

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The Apple Chart: Apple was working to print a second inside bar on Tuesday, with all Monday and Tuesday’s price action taking place within Friday’s range. The double inside bar indicates consolidation and was taking place on declining volume.

  • Apple is also trading in a rising channel pattern, which has been guiding the stock higher since March 13. Within the channel, Apple has been rising in an uptrend, making a series of higher highs and higher lows.
  • Although the channel pattern is considered bullish in the short term and bearish in the longer term, during market bull cycles stocks can break bullishly from the formation. Traders can watch for the stock to break up or down from Friday’s mother bar, likely on Wednesday, to indicate future direction.
  • Apple has resistance above at $194.48 and $198.23, and support below at $189.61 and $184.95.

Read Next: iPhone 15's Display Issues Reportedly Solved: From Display Size Increase To Price Hikes, Here's What We Know 
Photo: Shutterstock

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