Skip to main content

Is Apple Stock Finally a Buy?

Apple shares are rallying on Wednesday after an analyst upgrade. Is the stock finally a buy? Let's look at the chart.

Apple  (AAPL)  shares have been pretty disappointing so far in 2021.

The stock gained momentum into the end of 2020, before pulling back abruptly at the start of the year.

Apple then found its groove, running to new highs later in January ahead of earnings. Despite a huge beat on earnings and revenue - seriously, Apple’s revenue beat expectations by roughly $8 billion - the stock sold off.

It seemed like a buying opportunity at the time. After all, shares had been consolidating for months and the last quarter was clearly well ahead of expectations.

It didn’t matter though. In February, shares were rejected by the prior September high near $138 and shares have now slipped lower throughout the rest of the quarter. 

Obviously, it doesn’t help that the Nasdaq has been pressured, while Amazon  (AMZN) , Facebook  (FB)  and most of FAANG have struggled in that time as well.

With Apple up 3% on Wednesday thanks to an upgrade, is the stock finally a buy?

Apple, Amazon and Facebook are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AAPL, AMZN or FB? Learn more now.

Trading Apple

Daily chart of Apple stock.

Daily chart of Apple stock.

At the height of the tech selloff in early March, shares bottomed near $116. That was right at uptrend support (blue line), as Apple has so far avoided a test of the 200-day moving average.

With Wednesday’s rally, shares are reclaiming the 10-day moving average. However, that hasn’t been an issue. Instead, it’s the 100-day moving average that has been resistance lately.

Notice how this measure was strong support twice in November.

Bulls can still see more upside in the stock. However, there are several key overhead levels to know.

If Apple clears the 61.8% retracement, my focus will be on the 100-day moving average and the $126.75 level. A move over $127 puts Apple above all of these measures and more importantly, negates its pattern of lower highs.

Over the 50-day moving average puts $130-plus in play and opens the door to $138, then the $145 highs.

On the downside, a move back below the 10-day moving average puts the 200-day moving average and uptrend support in play. Below that and the $112 to $115 area is possible.