The price action in Apple (AAPL - Get Report) shares over the last year has been clearly mapped out by several key technical levels and simple charting tools, which could help in making trading decisions going forward.
In early 2015, the stock made a head and shoulders top above neckline support in the $120 area. That support and the intersecting 40-week (200-day) moving average were taken out in July, and the stock dropped rapidly, back down to the 50% Fibonacci retracement level of its 2013 low and 2015 high.
A reflexive bounce off this level took it back up to the neckline and the 40-week average, where it failed again, returning to previous Fibonacci support in the $92 area. A weaker second bounce retested the declining average and delineating a down trend line drawn off the right shoulder and the bounce highs.
This month, the 50% support level held a third time, and the stock is now testing the 38% retracement level of the 2013 and 2015 range. Moving average convergence/divergence is oscillating below its centerline, reflecting declining price and trend momentum, and Chaikin money flow has moved higher but is sitting on its centerline, reflecting equilibrium in buying and selling pressures.
On the daily chart, the most recent bounce can be seen taking the stock back up to the 38% retracement level, which is currently being reinforced by the 50-day moving average. There is a small gap to be filled directly above the average and the stronger resistance of the declining 200-day average and the long-term downtrend line.
The momentum indicators on this timeframe have turned bullish, with the relative strength index above its centerline, and the MACD making a bullish crossover and trending higher. The money flow index, a volume-weighted relative strength measure, has crossed above its centerline, and Chaikin money flow is in positive territory, suggesting renewed buying interest in the stock.
Apple has made a series of lower highs above a horizontal support line and formed a large triangle pattern on the charts. The stock price is currently situated directly below three levels of interior resistance, which will influence short-term direction, but the long-term future of the stock will be determined by the integrity of the triangle parameters.
From a fundamental perspective, Apple is a holding in Jim Cramer's Action Alerts PLUS charitable portfolio. Cramer and Research Director Jack Mohr recently wrote: "Positive sentiment in the stock appears to have been revitalized of late, and while we expect the upcoming quarter to remain weak, Apple still has many bright days ahead in the back half of the year (with the iPhone 7) and beyond (emerging-market opportunities and Services business)."