By Bryan McCormick
Last week I mentioned a potential bearish pattern in Apple (AAPL) that I thought was a bit speculative. When this "head and shoulders" formation failed to trigger, I suggested that the result would be a resumption of the existing trading range.
I had also mentioned that tech was the weakest link in the S&P 500 (SPY), given its heavy weighting, and that Apple was one of the highest-weighted stocks in the sector. A higher turn in AAPL was therefore essential to sustaining the nascent short-term uptrend in the S&P 500.
As it happens, traders piled into the stock, taking it well away from the potential pattern's trigger point, initially doing so on some rumor of a potential stock split which turned out to be bogus. Nonetheless, once off the lows, the bears had no technical advantage, and short-term momentum became positive.
(Click to enlarge)
So where does that leave the shares now? I have drawn in two level lines to show resistance and support for the range. Resistance is at the $215.50 area, in red. Support is at the $187 area, in green.
Until we get a catalyst that could move the stock out of the range, it is possible that the shares could trade anywhere within that range. The next big moment will be what happens when, or if, the stock next meets resistance, presuming the current short-term uptrend can be maintained.
Disclosure: No positions
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