Sunday, June 13, 2010

Apple Regains 50 Day Moving Average

AAPL


Apple CEO Steve Jobs introduces the iPhone 4 at 2010 WWDC


Overview
The short story: AAPL was down $2.45 for the week.  The long story is... AAPL is down -0.96% for the week, down -1.31% for the month, up +2.30% for the year, and up an amazing +205.03% since the March 9, 2009 market bottom. This equates to -$2.45 for the week, -$3.37 for the month, +$42.78 for the year, and an incredible +$170.40 since the March 9, 2009 market bottom! In addition, Apple is down -6.40% or -$17.32 from the 2010 YTD, and all-time, high, of 270.83 on April 23.

By comparison, the overall market, the S&P 500, is up +2.51% for the week, up +0.20% for the month, down -2.11% for the year, up +61.35% since the March 9, 2009 market bottom, and down -10.32% from the 2010 YTD high on April 23.  AAPL still is holding up better than the overall market downdraft, but did underperform the market this week.

Apple News and Fundamentals
A review and weekly update of Apple Inc. news and fundamental analysis is in the previous post.  A review and weekly update of USA and World market and economic news and fundamental analysis is hereOverall, the USA and global economic data remains cautiously optimistic.

Apple Daily Chart
Below is the AAPL daily chart for 2010.  A monthly chart is included at the bottom of this page for a broader perspective.

Noteworthy Closing Prices on Daily Chart below:
Current Close 253.51 (Yellow horizontal line)
2010 YTD & All Time High 4-23-10 270.83
YE 12-31-09 210.73
10 Month EMA 220.23


AAPL: Regains 50 Day Moving Average, but Bearish Signals Persist



Intermediate-Term Trend
The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, generated a sell/short/bear signal on Friday, June 11.  AAPL had been in a bull market since March 12, 2010. Therefore, AAPL is in an intermediate-term bull market and has remained so during the recent market pullback and related Flash Crash. That is, the 50d sma is now higher than the 25d sma.

Resistance
All resistance is recent, as AAPL only reached these lofty levels this year. The current closing price, the yellow horizontal line is below the 2010 YTD and all time closing high of 270.83 on April 23.  The most recent resistance, is just above at the May 14 and 17 closings at about 254.00. As can be seen, there have been 3 peaking actions this year and the current price is below them.  The middle, lower peak on May 12 of 262.09 would be an important benchmark to regain.  Apple did regain the lower yellow downtrend line, which is discussed below.

Support
The most recent support, probably minor, is just below at the May 14 and 17 closings at about 254.00.  There are multiple levels of support below this, including the April 15 close and peak of 248.92.

Moving Averages
AAPL is just above the 25 day and 50 day simple moving averages and remains comfortably above the 100d and 200d sma's.  The 25d sma is just below the 50d sma, as noted above. The 25d sma has leveled off after peaking on May 19 and the 50d, 100d, and 100d sma's continue to ascend. By comparison, the S&P 500, SPX, is below the 25d, 50d, 100d, and 200d sma's.

Uptrend Line
The yellow uptrend line, a rate of price ascent, is from the January 20, 2009 closing low of 78.20 up through the February 4, 2010 closing low of 192.05. The February 4 closing low has been the bottom for 2010.  AAPL spiked decisively above this uptrend line on February 24. AAPL has now stayed well above henceforth (except for Flash Crash Thursday, May 6, 2010).

Higher Downtrend Line
The higher downtrend line, a rate of price descent, is from the April 23, 2010 YTD and all time high of 270.83 down through the recent peak on June 2, 2010 of 263.95. AAPL has been below this downtrend line since.

Lower Downtrend Line
The lower downtrend line, a rate of price descent, is from the April 23, 2010 YTD and all time high of 270.83 down through the April 29, 2010 peak of 268.64. AAPL has again rose above this downtrend line.

Relative Strength Index (RSI)
RSI 14 day = 59.65 is reasonable, above the February 8 low of 33.22, below the April 15 high of 94.10
RSI 28 day = 45.55 is reasonable; above the February 8 low of 41.09, below the April 5 high of 84.63
The RSIs are both reasonable and signalling plenty of upside room.

MACD (12,26,9)
The MACD flipped to bearish on June 8 as a result of this recent dip.

Long-Term Trend
The 10 month exponential moving average of 220.23 is a long-term trend indicator.  That is the line in the sand, so to speak, for the long term signal of a bear market. AAPL is well above this signal at the current close.AAPL is in a long-term bull market and has been since April 2009.

Conclusion
Through the disappointing USA May jobs report, overall market pullback, uncertainty over the USA economic recovery, the Flash Crash, and the EU & Euro Crisis, the fundamentals at Apple Inc. never changed.  The fundamentals of Apple are actually improving and are reviewed in the previous post.  Apple Inc. is doing great!  AAPL is struggling with the overall market downdraft.  Apple has been charging ahead with the introduction of the iPad, iPad 3G, a iPhone 4, iOS 4, and a new mobile advertising platform (iAd). iPhone sales and market share are impressive and now reports of very strong iPad demand (including the international launch in May). The current price is low based on AAPL fundamentals.  The RSI 14 day and 28 day are reasonable.  The MACD is now flipping back and forth on the lack of a clear AAPL price trend. The intermediate-term trend became bearish on June 11. The long-term trend remains bullish.

Disclosure
We are long AAPL.


AAPL Monthly Chart


Below is the monthly AAPL chart since January 2005.  The overall analysis and commentary are the same as for the daily chart above.  The yellow horizontal line, the current price, and the yellow uptrend line are the same, and as described, on the daily chart above.  The white moving average line is the 10 month exponential moving average, which is the long-term bull or bear market signal, as discussed above with the daily chart.




AAPL

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