It as been hard to be a shareholder of Apple (AAPL) lately.
The stock has struggled since becoming a component of the Dow Jones Industrial Average (INDU) back on March 18, 2015. On that day it closed at $128.47. The stock looked great until it set its all-time high of $134.54 on April 28. Since then it's been a volatile ride, putting its 10-quarter earnings winning streak on the line when the tech bellwhether reports Tuesday after the market close.
Analysts expect the company to report earnings of $3.24 a share. Apple stock blossomed on Friday after Piper Jaffray reiterated its overweight rating and $179 price target. They say that the upside catalyst is the release of the iPhone 7 scheduled for September.
Thanks to the upgrade, shares of Apple, at around $101.50, are down 3.7% for the year to date, compared with a Dow down 7.6% for the same period. However, Apple is in bear market territory, 24.6% below its all-time high, compared with a Dow in correction territory 12.3% below its all-time high of 18,351.36 set on May 19.
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Below is the daily technical chart on Apple, which is very simple to read. The green line is the 200-day simple moving average and the blue line is the 50-day simple moving average. When the 50-day falls below the 200-day it's called a "death cross." This technical signal indicates lower prices lie ahead, which supports an investment strategy to sell strength. A "golden cross" occurs when the 50-day simple moving average rises above the 200-day simple moving indicating that higher prices lie ahead, which is a buy on weakness strategy.
The weekly chart below is negative. The red line through the weekly price bars is the key weekly moving average (a 5-week modified moving average). The green line is the 200-week simple moving average considered the "reversion to the mean." The red along the bottom of the chart is weekly momentum (a 12x3x3 weekly slow stochastic), which scales between 00.00 and 100.00. Readings above 80.00 indicates overbought and readings below 20.00 indicates oversold. A negative weekly chart shows the stock below its key weekly moving average with weekly momentum declining below 80.00 in a trend towards 20.00.
Here's the daily chart for Apple.
Courtesy of MetaStock Xenith
Apple closed Friday at $101.42. As noted the stock is down 3.7% year to date and in bear market territory 24.6% below its all-time high of $134.54 on April 28, 2015. Apple traded as low as $92 on Aug. 24, which was "Black Monday" in China. Last week's low of $93.42 was more accurate than the Aug. 24 (the New York Stock Exchange open that day under Rule 48 gave Apple an unrealistic number).
Note that Apple has been under a "death cross" since Aug. 26 after being under a "golden cross" confirmed on Sept. 13, 2013, when the the 200-day simple moving average was $66.02. The 50-day and 200-day simple moving averages are $109.58 and $118.20, respectively. Selling strength to the 200-day simple moving average Nov. 3 was the opportunity to reduce holdings at $121.84.
Here's the weekly chart for Apple.
Courtesy of MetaStock Xenith
The weekly chart for Apple is negative but oversold with the stock below its key weekly moving average of $105.31 with the 200-week simple moving average of $91.70 providing an important support. The last time the 200-week was tested was during the week of June 28, 2013. The weekly momentum reading declined to 14.58 last week down from 16.12 on Jan. 15 becoming more oversold.
Investors looking to buy Apple should place a good till canceled limit order to buy the stock if it drops to $94.16, which is a key level on technical charts until the end of this week. This level was tested at last week's low. Investors looking to reduce holdings should place a GTC limit order to sell the stock if it rises to $110.22, which is a key level on technical charts until the end of 2016.