Apple, Inc (NASDAQ:AAPL) was popping up over 1% on Monday, leading the S&P 500 slightly higher.
The tech giant has lagged the broad market index during the last two most recent rebounds, unlike during the last short-term bully cycle, which took place between June 17 and Aug. 17. During that time frame, Apple led the S&P 500 and showed comparative strength to the index.
On Monday, the S&P 500 was attempting to break up through a long-term descending trendline that’s been holding the SPDR S&P 500 (NYSE:SPY) down since Jan. 4, 2022, and which Benzinga pointed out most recently on Thursday.
If the SPY is able to close above the trendline and trade above the area for a few days, it could signal a larger reversal to the upside. If that happens, Apple is likely to continue higher within its uptrend, which could eventually bring the stock up to the 200-day simple moving average (SMA).
The 200-day SMA is an important bellwether. Technical traders and investors consider a stock trading above the level on the daily chart to be in a bull cycle, whereas a stock trading under the 200-day SMA is considered to be in a bear cycle.
The 50-day SMA also plays an important role in technical analysis, especially when paired with the 200-day. When the 50-day SMA crosses below the 200-day SMA, a death cross occurs, whereas when the 50-day SMA crosses above the 200-day, a bullish golden cross takes place.
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The Apple Chart: Although the S&P 500 is trading above the 200-day SMA, Apple remains about 6% below the 200-day. On Monday, Apple regained the 50-day SMA as support, however, which will give some bullish traders more confidence going forward.
- Apple reversed into an uptrend on Jan. 6, after printing a quadruple bottom pattern near the $125 mark. The stock’s most recent higher low was formed on Jan. 19 at $133.77 and the most recent confirmed higher high was printed at the $138.61 level the day prior.
- On Monday, Apple was surging over the Jan. 19 high-of-day, but hasn’t yet indicated the next temporary top has occurred. Eventually, Apple will print a reversal candlestick, such as a doji or shooting star candlestick, which could signal a retracement to print a low is on the horizon.
- If Apple closes the trading session near its high-of-day price, the stock will print a bullish kicker candlestick, which could indicate higher prices will come again on Tuesday. If the stock runs into sellers who cause the stock to close the trading session with a significant upper wick, it could indicate the next higher high is in and Apple will trade lower.
- Apple has resistance above at $143.51 and $146.41 and support below at $137.33 and $134.35.
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