Publish date:

Is Apple Stock Finally a Buy? Let's Look at the Chart

Apple is finally showing some signs of life but will it be enough to force a run to new highs? Let's take a look at the chart.

Apple  (AAPL) - Get Report has been a bit perplexing over the last several quarters. Despite its sleepy price action over the past few months, the stock turned some heads this week.

That’s not to say Apple has performed badly this year but the stock has mostly done nothing. Shares have fallen 1.5% so far in 2021. Its WWDC event didn't do much to give it a boost either. 

That compares to a 13.8% return for the S&P 500. Apple’s one-year gain of 52% beats the index’s gain of roughly 40%, however.

While the action is odd, Apple isn’t alone on the sideways action. Amazon  (AMZN) - Get Report is another FAANG component that’s struggled for traction since topping out in early September.

The stock has done slightly better on the year, up almost 4%, but that’s mostly due to Amazon’s rally over the past few days with shares up 7.6% from last week’s low.

Apple’s funk is even more complexing given that it has crushed earnings and revenue estimates not once, but twice so far this year. I mean, absolutely obliterated expectations.

It’s hard to blame investors who stand by the company even after the lack of a post-earnings rally. Is that lack of momentum about to end?

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

TST Recommends

Trading Apple

Daily chart of Apple stock.

Daily chart of Apple stock.

Like Amazon, Apple topped out in early September after completing a 4-for-1 stock split. That high came near $138 and that level has played a role ever since.

While Apple did break to a pre-earnings high of $145.09, it couldn’t hold above this level in January despite solid results. We saw similar price action in April - that is, a sell-the-news event - despite the stock still being lower from the prior report.

Apple got swept up with a bit of selling in May due to the bear market in high-growth tech stocks. While shares weren’t decimated, the stock has been trapped below $128 and the 50-day moving average.

That changed on Monday, though.

Shares jumped just 2.5% that day, but it was enough to send the stock over both of these measures. Now trying to build some momentum over $130, let’s see if Apple can get a rotation over the $130.60 mark.

If it can and the news from the Fed doesn’t derail the markets, $138 is a possible upside target. Above $138 and $145 is in play.

On the downside, keep an eye on the 50-day moving average and $128 level. Holding above these measures is important in the short term. A close below them could put the 200-day moving average and uptrend support (blue line) back in play.