However, the Cupertino, Calif., tech titan has yet to find its footing, with its shares continuing to slip.
To be fair, it’s not getting hit like high-growth tech stocks have been. Still, as investors look for stability, they’re looking at the largest name in the market.
For months — particularly in the fourth quarter and through the first half of Q1 — FAANG stocks like Apple, Amazon (AMZN) - Get Report and Facebook (FB) - Get Report have traded sideways, consolidating the large gains from the second quarter of 2020.
Despite robust earnings results — where Apple reported revenue $8 billion ahead of expectations — the stock still couldn’t get going.
I was bullish on the post-earnings dip, provided support held up. It didn’t and it was a red flag, as the shares went on to retreat. Is it finally time to buy?
Trading Apple Stock
A look at the chart shows that sellers still remain in control. I know that’s not what investors want to hear, but the technicals are clear.
The 10-day, 21-day and 50-day moving averages have all turned lower and Apple is below all three of them, as well as the 100-day moving average.
Further, the 10-day moving average is acting as resistance. It rejected Apple last week, leading to a brief weekly-down rotation this week. For now, it’s resistance again on Wednesday.
On the upside, the 10-day moving average is the short-term line in the sand. While sellers may be in control, that doesn’t have to last.
If Apple can reclaim this mark, it quickly opens up the $124.50 to $126.75 range. In that area, the stock finds its 100-day and 21-day moving averages, the 61.8% retracement and prior support from January that turned to resistance in March.
Above this zone puts $130 and the 50-day moving average in play, followed a possible move back to $138. When Apple gets moving, it can really rally in a hurry.
On the downside, the outlook is pretty clear. Keep an eye on this week’s low at $116.21 and the 200-day moving average. Below puts the 50-week moving average in play.
So how do we answer the question, “is Apple stock finally a buy?”
For long-term investors, I would feel comfortable buying this dip, particularly if we see Apple down 20% from the highs and at the 200-day moving average.
For short-term traders, Apple is less attractive on the long side unless it can reclaim the 10-day moving average or dips further below current levels.