It’s no surprise that Apple stock plays such a big role in day to day stock market moves as it carries an over-sized market cap tag in the S&P 500, Nasdaq, and Dow Jones Industrial Average. So even if you don’t invest or trade Apple (AAPL) stock, it’s still a good idea to know what this tech beast is doing.
Back in early February, I did some research on Apple’s bullish continuation patterns during its multi-month advance off its 2013 lows. Sure enough, Apple stock broke out of its bullish consolidation and rallied as high as 133.60 (from 118.63 at the time of that post).
One of the characteristics of Apple’s past consolidations has been to back and fill and retest its breakout level before charging higher once again. And this appears to be happening once again. You can see the pattern on the daily and weekly charts.
The caveat that investors need to bear in mind is that any time a stock pulls back and “consolidates”, it still runs the risk of a breakdown or deeper pullback. Below you can see how Apple stock has flirted with and held its February breakout level thus far. AAPL price resistance resides at the downtrend line (currently around 128.00) and support near the breakout level at 120.00.
Apple Stock Daily Chart
On the weekly chart, you can see the significance of the consolidation phases for Apple over the past 21 months. No one knows for sure if this will set up another run higher, but we can better manage our trades and investments if we understand how trends emerge, continue, and break down. And in the case of Apple, it could have an affect on the larger market.
Apple Stock Weekly Chart
Thanks for reading and trade safe.
   Follow Andy on Twitter:  @andrewnyquist
No position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.
