Apple (AAPL) - Get Report opened today's session with its biggest upside gap since its earnings inspired breakout back on Feb. 1. This morning's upgrade inspired strength pushed shares to new post election highs as the rally off the November low stretched to 35%. With AAPL well into overbought territory a healthy pullback is overdue.
Apple began the second leg of its post election rally with the help of a huge breakout gap on Feb. 1. This earnings inspired surge drove the stock to a 6% gain, its best single day rally since July of last year. By the middle of February AAPL had moved past its previous all time highs set back in the spring of 2015. The stock was now entering extremely overbought territory, its highest weekly MACD( moving average convergence/divergence) reading since early 2012, as March began. This month, despite a fourth straight higher monthly high, it has become clear upside momentum has eased.
In the near term AAPL investors should keep a close eye on last week's low. A clear break below $138.00 would take out this level indicating a potentially deep pullback is underway. Until then a more cautious view is may prove wise. A bit of patience during the current phase will likely provide much lower risk entry opportunities. A retest of the multi-month 2015 highs may be ahead.