Apple, like other US and Global equities, has had a nice run off the February lows. However, in my research I uncovered three charts that suggest the bias has shifted back toward the downside across multiple timeframes for Apple stock (AAPL). So today let’s take a look at Apple stock weakness and why it may persist for a bit.
The daily chart of Apple (AAPL) provides a tactical view of the failed breakout currently occurring in the stock on an absolute basis. Last week, prices made new marginal highs and attempted to break above the downtrend line from the July highs, but quickly reversed as momentum diverged negatively.
This confluence of resistance at the April 4th highs, 61.8% retracement of the Nov-Jan decline, and downtrend line from the July highs is proving to be an issue for Apple stock. And it should remain on your radar.
As long as prices remain below 111.81 on a daily closing basis, the bias remains to the downside. From failed moves generally come fast moves in the opposite direction, and that’s exactly what I’m looking for in Apple. So be on the lookout for further Apple stock weakness.
Apple Stock Chart (AAPL)
In addition to its issues on an absolute basis, Apple is currently running into overhead supply relative to both the S&P 500 and Nasdaq 100.
The chart below of AAPL / SPX represents the relationship of Apple stock price relative to the S&P 500 Index.
The downward sloping 200 day moving average suggests that the long-term trend in this ratio remains lower. The fact that momentum remains in a bearish range and prices are testing a key resistance level both indicate that the bias remains to the downside across the short, intermediate, and long-term. As long as this ratio remains below the downtrend line from the early 2015 highs and prior support level near 0.054 on a daily closing basis, the weight of evidence suggests that shares of Apple (AAPL) will continue to struggle relative to the S&P 500.
The conditions discussed above are also true in the ratio of AAPL / NDX, which represents the relationship of Apple stock price relative to the Nasdaq 100 Index. The levels are slightly different, but overall the conditions are almost identical.
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