Apple Rises Amidst Surging Markets, but Investors Shouldn't Chase the Momentum

The Dow Jones Industrial Average finished the trading week by gaining 198 points for the week to close at a record 20,269. The S&P 500 gained nearly 19 points for the week to close at 2,316. The Nasdaq gained 67 points for the week and closed at 5,734 while the Russell 2000 closed at 1,389 for the trading week.

Once again, the S&P volume traded just shy of 300 million shares, its lowest volume week in 2017.

The S&P 500 and Nasdaq are extreme overbought on the weekly time frame, according to our SST Strategic Algorithm Numbers. The last time we saw this extreme overbought weekly condition for the S&P 500 and Nasdaq was the week ended Aug. 9, 2016.  From there, all four stock indexes retraced their gains and traded at or below their 22-day moving average.

Thus, it would appear that this stock market is at or near the end of its parabolic move to the upside since the election of President Donald Trump in early November.

The indices could still move higher, but the probabilities have greatly increased that we see some downside weekly action going forward.

One stock that has been on a tear has been Apple (AAPL) . Apple closed the trading week with a 2.36% gain.  For the month of February, Apple has gained 8.88% and for the year 2017, it has risen 14%.

Apple is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. See how Cramer rates the stock here. Want to be alerted before Cramer buys or sells AAPL? Learn more now.

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