Quick Take: Will Apple Stock Continue to Grind Higher?

stock market, stock chart, technical analysis, investing

By Andrew Nyquist
Let’s face it, Apple (AAPL) is a popular stock.  Many people own it, many love it, and many watch it as a current barometer of market health.  Since the stock market bottom last week, Apple stock has seen its shares run 10% higher.  But the stock has been volatile of late and continues to trade below its recent highs.   So what gives?

Well, the stock has been dogged by uncertainty as investors try to digest the news of Steve Jobs passing along with a successful launch of the iPhone 4S.  Bearish investors are quick to note the brand’s overall popularity as a contrarian reason to doubt Apple’s ability to keep up with growth targets.  Bulls, on the other hand, point overseas markets and strong brand equity as reasons to buy or remain in the stock.  Either way, I don’t have a position in Apple stock, but think it’s particularly useful as a general market indicator.  So let’s turn to the technical chart for a quick update.

Technically, Apple stock is backtesting both its 50 dma (day moving average) and recently broken uptrend line.  If Apple can decisively break 385, it could run to 400-405 before a possible test of the highs.  I would expect any further near term lift to be more of a grind, as the backtest trendline could slow things down a bit.  Bulls will note that the stock is still quite oversold.  But ultimately, Apple stock will need to break and hold its 50 dma in order to set the stage for a move higher.

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No positions in any of the securities mentioned at 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 his employer or any other person or entity.