Saturday, September 11, 2010

Apple Tests Top of Trading Range (Charts) AAPL


Apple CEO Steve Jobs announced new iPods, iTunes, iOS, TV on September 1, 2010

Apple Overview

AAPL Apple tested the top of the trading range this past  week, after regaining the 50 day and 100 day simple moving averages the prior week. However, the 50d sma did cross below the 100d sma on August 31, a Death Cross, revealing the range bound trading of AAPL since June 29. AAPL is up +1.79% for the week, up +8.35% for the month, up +25.00% for the year, and up an amazing +216.94% since the March 9, 2009 market bottom. This equates to +$4.64 for the week, +$20.31 for the month, +$52.68 for the year, and an incredible +$180.30 since the March 9, 2009 market bottom! AAPL at the September 10 close of $263.41 is down -3.89% and -$10.66 from the all-time closing high of $274.07 on June 25.

S&P 500 By comparison, the overall market, the S&P 500, SPX, is up +0.46% for the week, up +5.74% for the month, down -0.50% for the year, and up +64.01% since the March 9, 2009 market bottom. In addition, SPX is down -8.85% from the April 23, 2010 YTD closing high of 1217.28. AAPL is outperforming the overall market long-term since the March 9, 2009 market bottom, outperforming the market for 2010, and outperforming the market short-term. A review of the S&P 500 (S&P 500 Regains 100 Day Moving Average) is here.

Apple News and Fundamentals Apple was in the news on September 1 with the Special Event. At this event, CEO Steve Jobs launched new iPods, iTunes, iOS, and Apple TV. A summary and review of these announcements is posted here (Steve Jobs Unveils New iPods, iOS, iTunes, TV) and here (Apple Announces New iPods, iTunes, iOS, TV). AAPL is currently trading at 19.83 PE (ttm) and the EPS is 13.28. More stellar financial results are expected by Apple for this quarter, to be announced in October.

Economic and Market News Information about the USA and world economies are posted at Boom Doom Economy and Matrix Markets.

Apple Tests Top of Trading Range

AAPL Daily Chart Below is the AAPL daily chart since early April 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 $263.41
2010 YTD & All Time High 6-18-10 $274.07
2010 YTD Low 2-4-10 $192.05
YE 12-31-09 $210.73
10 Month EMA $235.79

Trading Range AAPL broke down to begin a trading range June 29. This was after setting 2010 YTD and all-time highs the week before. The highest closing price subsequently has been 264.08 on July 27 (the highest yellow horizontal line on the daily chart below). The lowest closing price since has been 239.93 on August 24 (the lowest yellow horizontal line on the daily chart below). AAPL pinned upwards through the top of this trading range (264.08), on an intraday basis, on Wednesday, Thursday, Friday (September 8, 9, 10) but failed to close above. AAPL pinned upwards almost to the yellow downtrend line, as described below, on September 9. Tremendous support was shown August 24-26 before AAPL, and the market, rallied above. This price area could be argued as the "new bottom" of the trading range - closing lows of 240.28 and 239.93 on August 26 and 24.

Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, generated a sell signal on July 30. That is, the 50d sma is greater than the 25d sma. Previously, a buy signal had been in effect since June 23.

Resistance Because AAPL is below the June 18 YTD and all-time high, there are multiples levels of resistance above. Current resistance, the  top of the trading range (discussed above the chart) is the July 27 close of 264.08, held on September 8, 9, 10. Surpassing this price clearly places AAPL up near the lofty all-time highs. Then the key resistance and benchmark prices above are the earlier 2010 YTD and all-time high on April 23 of 270.83 and the latest all-time high on June 18 of 274.07.

Support Because AAPL is above the YTD lows and pullbacks, there are multiple levels of support below. The August 4 closing high of 262.98 is recent support, among many. The 100 day simple moving average (255.85) and the 50d sma (253.83) were regained on September 3 and now are important support.

Moving Averages AAPL continues above all the daily simple moving averages on the chart: the 25, 50, 100, and 200. The 25d sma has began slightly ascending, but is below the 50d and 100d. The 50d sma has also began ascending, but crossed below the 100d sma on August 31 - a Death Cross. The 50d sma continues above the 25d and 200d sma's. The 100d sma is ascending and above the 25d, 50d, and 200d sma's. The 200d sma continues to ascend, indicating the overall trend is upwards.

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 dropped below this trendline on August 23, but regained it on September 3 and now has been above for 5 consecutive trading days.

Downtrend Line The yellow downtrend line, a rate of price descent, has been created by the pullback from the June 18 all-time high. This downtrend line is from the June 18 all-time closing high of 274.07 down through the June 22 sub-peak of 273.85. AAPL has stayed below since, but nearly pinned upwards through on September 9.

Relative Strength Index (RSI) The RSI 14 day = 67.07 is reasonable, ascending towards overbought territory, but well above the 2010 YTD low of 21.49 on August 24. The RSI 28 day = 51.08 is reasonable with plenty of upside, and above the 2010 YTD low of 38.25 on August 31. The RSIs continue to have upside potential.

MACD (12,26,9) The MACD flipped to bullish on September 2 after being bearish since August 11. The MACD has been up trending since August 26 (11 consecutive trading days). The current +2.47 on September 10  is just below the 2010 peak was +2.49 on March 10. The 2010 low was -3.55 on May 7. Previously the highest was on November 4, 2008 at +3.41.

Volume AAPL traded 13.8M shares on Friday, September 10. The 20 day moving average is approximately 16.1M and decreasing slightly. Volume began decreasing for AAPL on July 22, when the 20 day moving average was was approximately 29M! This recent rally has not generated a spike in volume, except on September 1, when CEO Steve Jobs introduced new products at the Special Event.

Long-Term Trend The 10 month exponential moving average of 235.79 is a long-term trend indicator and shown on the monthly chart below. 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 Uncertainty over the continuation of the USA economic recovery, or at least the rate of recovery, and previously the Euro Crisis have caused the markets to break the bull market trend that began in March 2009 and peaked in April 2010. This has affected AAPL plus the iPhone 4 antenna issue created additional uncertainty. Regardless, the fundamentals at Apple Inc. have been great. Apple has been charging ahead in 2010 with the introduction of the iPad, iPad 3G, a iPhone 4, iOS 4, and a new mobile advertising platform (iAd), a new line of iPods, iTunes, and even Apple TV. "Apple is beginning the strongest product cycle in the company's history, led by the iPad and iPhone 4", stated Deutsch Bank on June 22. The current price has not caught up with AAPL fundamentals. The intermediate-term price trend continues bearish to neutral, but the the long-term price trend remains bullish.

AAPL Monthly Chart

Below is the monthly AAPL chart since January 2005. The overall analysis and commentary is the same as for the daily chart above. The higher and lower yellow horizontal lines are the current trading range discussed above. The 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.

About Apple
Apple Inc. achieved a milestone the week of May 24, 2010, passing Microsoft in market capitalization to become the largest technology company, and second overall largest company, in the USA. AAPL's market cap is now $240.64 billion, compared to Microsoft's of $206.39 billion. Exxon leads with $311.62 billion. For the last quarter, Microsoft still leads Apple in Revenues $16.04B vs $15.70B, Net Profit $4.52B vs $3.25B, Net Profit Margin 28.2% vs 20.7%. Apple is now 19.24% of the NASDAQ 100 index, as measured by the QQQQ ETF, weighted by market capitalization. AAPL is one of the most traded stocks in the USA.

Related Articles and Links
Apple TV vs. Google TV (Video) *Who Will Win?* Osprey Flyer
S&P 500 Regains 100 Day Moving Average (Charts) Matrix Markets

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