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Can Apple Rally to New Highs Going Into Year End?

Apple is just off its all-time high, but it still doesn't seem like this one has been getting much love. Here's how it can rally into year end.

Apple  (AAPL) - Get Free Report is only a few dollars off its all-time high, while sporting a $2.5 trillion market cap. So why are traders and investors so frustrated with this name?

It’s likely because the stock has spent much of the past year consolidating. Shares are up just 7.75% from the 2020 high and as recently as June, the stock was actually down vs. the 2020 high, which was set in August of last year.

However, thanks to the stock’s rally in 11 of the past 13 weeks, it’s been able to turn those losses into gains.

Still, the stock lags the S&P 500, both over the past 12 months and so far in 2021.

Over the past 12 months, the index is up about 30% vs. Apple’s gain of 17.5%. So far this year, the index is up 20% to Apple stock’s 12%.

That’s not the only frustrating part. Apple continues to demolish earnings expectations, but continues to struggle with post-earnings momentum. 

Just last quarter, the company beat revenue estimates by more than $8 billion, yet shares are roughly flat since the report. 

It’s operating at an incredible level and regardless of whether the stock rewards shareholders in the short term, the earnings prove why Apple is a reliable long-term holding.

Now, will investors begin to realize more rewards?

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Trading Apple Stock

Daily chart of Apple stock.

Daily chart of Apple stock.

Even after that move up to $145.09 in January -- a record high -- Apple still struggled with the prior all-time high from 2020 near $138. In July, Apple eventually cleared that $145.09 mark. 

Now building a base above $145, investors are looking for the next catalyst to take the stock higher. Perhaps it will be new product launches, which Apple typically does in the fall. Maybe it will be a rotation into this name and out of others.

In any case, bulls are hoping this consolidation phase resolves higher, not lower. 

If it does, they desperately need to see the stock clear the $150 level and more importantly, stay above it. Thus far, this level has been resistance.

Above $150 and the 161.8% extension is in play near $160. If Apple clears that, the two-times range extension near $173 is in play. Eventually, long-term investors may be able to turn their attention to the $195 to $200 zone, if Apple can clear $175.

On the downside, bulls must keep the $145 level on their radar. Not only was this the prior high, but it’s roughly where the 10-week and 50-day moving averages currently come into play.

A dip to this level may be bought, provided Apple is able to hold these levels as support. Should the stock flush lower, the $138 level may be in the cards.

For now, watch for a close over $150 or a dip to $145.