Is It Time to Buy Apple?

Ed Ponsi

It's often been said that Apple is stock that should be owned rather than traded. However, if the opportunity presents itself, why not do both? Now that the excitement over the Apple's earnings and stock split have passed, is it time to pick up some shares for a trade? Let's go to the charts to find out. 

Apple chart by TradeStation

Since hitting its March lows, Apple has been on a bullish trajectory. From the split-adjusted March 23rd low of $55, the stock more than doubled, closing at $134 per share on September 1st. 

When a stock exceeds the upper barrier of a bull channel, that's one signal that it's overbought. Apple also received an overbought signal from its relative strength index indicator, or RSI. Now that the stock has cooled off, Apple's RSI is in neutral territory. 

Another interesting point is the way Apple's volume has pulled back along with the stock. This is a good sign, because it indicates that institutional buyers are reluctant to sell Apple. 

What's the game plan for Apple? Notice how the stock's 50-day moving average, in blue, closely matches its trend line, in black. The plan is to buy Apple for a trade anywhere from $110, the current location of the 50 day moving average, down to $105, which is where the stock's trend line resides.

The fact that institutions want to hold on to Apple should come as no surprise. Apple has rewarded investors with spectacular returns, rising over 86% in 2019 and boasting a 53% return year to date. 

Is there a stock, commodity, or currency you'd like to see analyzed on Ponsi Charts? If so, feel free to leave a message in the comments section if you have a request.

Ed Ponsi is the managing director of Barchetta Capital Management, and is the author of three books for publisher Wiley Finance. A dynamic public speaker, Ed has made appearances around the world, in such diverse locations as Singapore, Dubai, London, and New York. For more information about Ed and his work, click here.