A_Cryptastic_Mind

(!) WARNINGS for AAPL holders: strong bearish signals!

NASDAQ:AAPL   APPLE INC
I’m writing this message as a considerable warning to all AAPL holders. I am a long term investor myself, buying most of my position at the correction leg around $55 as shown in the graph (at point '2") at the first highlighted correction in 2013.

I actually wrote a similar post on January 29th, but because it contained some external links, Tradingview blocked the post. You can nevertheless still see the graph I made back then:



I found this chart compelling enough to repost it, albeit with a nice update ;)

I took some profit back then in February, at around $180, so really at the top. Subsequently, a drop occurred to 150ish. Today, price is back up to the $180 level. But the main story I had back in February still holds true.
Even though I'm relatively bearish now, I am still holding a small position just out of principle: I see myself as a long term holder of AAPL .

Sidenote: I noticed similar red flags on the leading European index DAX30, and the S&P500.

DAX30


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Now, the bearish-oriented title doesn’t promise much upside for AAPL , & when I look at the longer term graph of AAPL , I get the creeps and shivers. Practically a multitude of indicators & other information on the chart show us flickering red lights all over the place. Here we go:



(1): AAPL has been in a long term upward trend channel since 2009 more or less, it has hit upper resistance of the trend channel twice before, and each time it fell right back to the trend channel support. You can see that in "1" and in "3". We are now again touching the upper resistance line in "5", a small breakthrough took place but couldn’t hold, sending the price right back to the $150 area. Nevertheless, the overall momentum in the market remains positive and Apple got a boost to get back to today's $182. That is out of the trend channel, and even beyond resistance. But Apple is already the largest stock on the planet, and no way that it can go vertical like our friend Bitcoin . We can theoretically expect the price to fall back to the lower support of the trend channel around "6"! That would imply a price level of around $140 (-23%)



(2) If we have a look at the section just below the graph, The MACD (Moving Average Convergence Divergence), theory tells us that if the blue and red line cross each other above zero and the red line comes above the blue line, that we have a bearish reversal. Just have a look at the graph and you can see this happening in 2007-ish, just before 2013, just before 2016, and, well, right now (almost).
—> Vice versa, we can see a “bullish” (if not “golden”) cross when the blue line crosses the red line and blue comes on top. This is also clearly visible in the MACD section.



(3) The lower section shown here is the RSI or relative strength index . To keep things brief: this indicator can typically be relied upon to confirm a bearish or bullish stance. This holds true quite visibly for AAPL & we are seeing a confirmation of the downward signal in the MACD quite clearly before each pullback.

Conclusion:
I am a long term holder of AAPL but recently took some profit around $180. Why? Because the technical picture points to a major pending bearish reversal. Long term trend channel since 2009 is acting as a major resistance, MACD is almost showing a death cross, & RSI confirms that bearish stance.
Komen: Note that we still have a couple of months to go before this scenario would likely take place. This is a monthly chart, and we are not making a death cross just yet. However, we are above long term resistance, and that is not something that I don't see holding for a prolonged period of time. Apple is too big to go vertical. And if we can't crush the resistance, we fall back to support.

In the meanwhile, I think we will see some upward price movement (or some consolidation) first (also see graphs below).

Have a look at other compelling graphs on the DAX30 and the S&P500 here:




Our OptionsPlayers community mostly got out of long AAPL positions yesterday. We've been saying the same thing. I'm willing to call anything above $166 a retracement before another leg up. Below $166 I'm bearish on the monthly chart.
+1 Balas
@Tracks, thanks for commenting! Appreciate the view
Balas
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