But for a mega-cap tech stock with a $2 trillion market cap we’re talking about some serious capital needed to move the stock. It’s also a big move for a stock that’s been very sluggish over the past few months.
The rally doesn’t come without news. On Tuesday, reports began circulating that Apple will look to increase its iPhone production by 30% in 2021.
Given the profitability of the iPhone, the amount of revenue it generates and how it may help propel the company’s services revenue, investors were obviously thrilled with the news.
However, we need to see this rally stick for it to become meaningful in any way.
When looking at the chart above, you’ll notice how long Apple stock has been trading in a sideways pattern.
The stock put in a lower high near $125.40 when it peaked in October, followed by another lower high in November.
With Tuesday’s burst high, Apple is clearing both of those highs on the day. What traders desperately want to see is a close above both marks, which will hopefully lead to an increase in bullish momentum.
So far, a bulk of the volume is taking place above that $125.39 rotation point, (the October high). To build above it and take out Tuesday’s high near $127 could put the all-time high back in play at $137.98.
Stocks tend to correct either through price via a pullback or through time via sideways consolidation. That doesn’t mean Apple stock won’t pull back, only that it has done a great job consolidating its recent gains.
The longer it can build steam above $125.40, the more bullish it becomes. A close above $138 put $150 is on the table.
If the move fails to stick and Apple loses the $125.40 mark, the 10-day moving average is on the table, followed by last week’s low at $120.15.