Can Apple Break Out on Its WWDC Event?

Apple continues to consolidate despite excellent earnings and strong trends. Can its WWDC event break it free?
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Has Apple  (AAPL) - Get Report been a frustrating long position or what? Despite its sluggish price action, there is a silver lining.

Corrections tend to play out in one of two ways: through price or through time.

If it's the former, the stock usually suffers a brutal correction, unraveling a huge chunk of gains in relatively quick fashion. If it’s the latter, the correction tends to take much longer but it’s far less painful.

While these "corrections through time" can be frustrating because they take so long, investors don’t have to endure the emotional trauma that comes with a painful price correction.

Will Apple’s WWDC event change that? Follow the live updates here.

The company’s Spring Loaded event wasn’t enough to jumpstart the stock. It’s two blowout earnings reports weren’t enough either.

In that light, its WWDC event may not change things either. But after hitting a 52-week high almost a year ago, it’s only a matter of time before we get a solid move in the stock.

Microsoft  (MSFT) - Get Report, Alphabet  (GOOGL) - Get Report, Nvidia  (NVDA) - Get Report and others large-cap tech stocks have joined the party. When will Apple show up?

Apple, Microsoft, Alphabet and Nvidia are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AAPL, MSFT, GOOGL or NVDA? Learn more now.

Trading Apple 

Daily chart of Apple stock.

Daily chart of Apple stock.

Much like the past few quarters, Apple stock is not giving investors much to work with despite its upcoming event.

Shares are slightly lower on the day, but continue to build upon the recent pattern. That is, holding up above the 200-day moving average and uptrend support.

As it stands, Apple is building out a massive ascending triangle pattern. That’s a bullish formation where uptrend support continues to guide the stock into a static level of resistance. In this case, resistance is coming into play around $135 to $138.

However, over time the 200-day moving average has seemed to become less important to the bulls’ case. The risk is a post-event selloff that takes Apple below the 200-day and uptrend support.

With the May low just below current levels at $122.25, a monthly-down rotation could be possible.

There are other moving averages nearby on the larger time frames - like the 50-week and the 10-month - but if the stock experiences increased selling pressure, perhaps the first-quarter low at $116.21 will be in play.

On the upside, I want to see Apple clear the 50-day moving average. If it can do that, $130-plus is doable, opening the door to that stubborn resistance area between $135 and $138, as well as the May high near $134.

If by chance we get a move through $138, the highs near $145 are in play.

The bottom line: Keep an eye on the 50-day moving average on the upside and $122.25 on the downside.