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Apple: Buy or Sell on Monday’s Event? Check the Chart.

Apple's October event may help break the stock out of its current trading range. The question is: Which way will it break?

Apple  (AAPL) - Get Apple Inc. Report is preparing for another product launch event, planning its presentation for 1 p.m. U.S. Eastern on Monday.

Most are anticipating a new MacBook announcement, specifically looking for a new chip in the bigger MacBook Pro models.

Our focus is less on the news — or in this case, the product — and more on the reaction in the stock price.

Apple stock is slightly lower to start the week, down about 0.5% and opening lower like the indexes.

The stock still continues to hold a key level as support but is struggling to break above another key level. In other words, it’s stuck -- and traders are hoping today’s announcement can break Cupertino free.

So far, the stock is doing a good job shaking off last week’s news regarding lower iPhone production due to a chip shortage.

Analysts have come to the stock’s defense, but even without them, Apple shares have traded well considering the news of its biggest revenue generator. 

Let’s look at the charts.

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Trading Apple Stock

Daily chart of Apple stock.

Daily chart of Apple stock.

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In early June, Apple stock caught a strong bid, surging from the low-$120s to $150. Following some consolidation, the stock ultimately ran to a high of $157.26 on Sept. 7.

That’s a few days after the S&P 500 began its correction, but Apple eventually got caught up in the selling pressure.

The shares moved lower in an ABC correction but are mostly stuck between two key levels.

Those levels are $138, the “blowoff high” from September 2020, and $145, the January high.

So far, $138 is acting as support, along with the VWAP measure from April. On the upside, $145 is acting as resistance. 

Worth mentioning is that Apple stock has also reclaimed the 10-day and 21-day moving averages.

If we see a sell-the-news reaction, I want to see whether the VWAP measure and $138 to $140 area continues to act as support.

A break below these levels puts the 200-day and 10-month moving averages on the table, followed by uptrend support (blue line).

On the upside, a move over $145 opens the door to the 50-day moving average. If this measure acts as resistance, it will be important to see if $145 acts as support. 

Above the 50-day puts $150-plus back on the table.