Apple (AAPL - Get Report) has been a market leader on a number of fronts for years -- in product innovation, marketing, management, and I am sure other categories that fundamental analysts are impressed with. With the iconic iPhone celebrating its 10th anniversary, presents and stories and interviews are expected.
The traditional anniversary gift for 10 years is tin or aluminum, but the modern gift is diamond jewelry. I guess I will be very un-traditional and just give some charts and indicators.
Let's take a look at some different technical techniques to see what they might suggest for the next few months.
In this daily bar chart of Apple going back the last 12 months, above, we can see that prices have risen significantly. There are some upside price gaps and volume spikes along the way to a high in May. Apple rallies and stays above the rising 50-day moving average line, except for a correction in November and early December and the price action in June so far.
AAPL is above the rising 200-day moving average line, and two successful tests of the line can be seen in September and November. Unlike the pullback in the price of Apple in November, the selloff this month has been swift and prices have so far failed at the underside of the 50-day average line.
If we ignore the volume spikes since last July, the overall pattern of volume appears to be slowing. The daily On-Balance-Volume (OBV) line is mostly neutral from July through November, and then rises to March where it turns neutral again. The line has weakened in June, suggesting that sellers of Apple have become more aggressive with the volume of shares traded on down days being heavier than on up days.
The trend-following Moving Average Convergence Divergence (MACD) oscillator moved below the zero line in June for an outright sell signal. The oscillator might be narrowing towards a cover shorts buy signal, but that depends on the upcoming price action.
In this five-year weekly chart of Apple versus or the Nasdaq, above, we can see that the share price of Apple has under-performed the NASDAQ. Yes, under-performed.
In this weekly bar chart of Apple, above, we can see some more signals that could be a problem for the bulls. Yes, Apple is above the rising 40-week moving average line. The line has acted as both support and resistance over the past three years. The weekly volume pattern looks like it has been declining since August 2015.
Older technicians (myself included) like to see volume expand on rallies. The weekly OBV line has risen over the past 12 months, but it looks like it has put in a peak the past two months. The weekly MACD oscillator in the lower panel has crossed to a take profits sell signal.
Here is another weekly chart of Apple. On this chart, we show the Parabolic Stop and Reverse (SAR) indicator, which is in a short mode. The weekly OBV line is peaking, and the slow stochastic indicator at the bottom is not (yet) extremely oversold. In other words, a defensive position is suggested.
We present above a monthly Japanese candlestick chart of Apple with some simple indicators. Starting with the white, or empty candle pattern in July 2016, we can see eight record highs to May 2017 (December is a white candle, but it does not make a new high). The eight to 10 record highs is a potentially bearish pattern. After eight (or nine, or 10) records up or down, the analyst is looking for the next bar to be a bearish pattern. Indeed, the red bar in June is bearish. Follow-through weakness in July should tip the scales.
Bottom line: focus on the price action and not the backward looking "news" stories. My parameters right now would be that a close below $140 would be bearish, and a couple of closes above $150 would be positive.
Apple's shares were down 1.4% to $143.75 early Thursday afternoon.
This article originally appeared at 09 a.m. ET on Real Money, our premium site for active traders. Click here to get great columns like this from Jim Cramer and other writers even earlier in the trading day.
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