Apple has always been considered a leader in the stock market (AAPL) – Get the Apple Inc. report. Stocks look weaker lately.
I think this doesn’t come as much of a surprise, as I see as if the Nasdaq is going down due to the fear of higher interest rates and the market as a whole is still suffering.
Nevertheless, Apple is still a strong champion among the holdings of big companies. This is not necessarily due to the success of its App Store, nor to its potential as a “master of the metaverse”.
Instead, I think it’s pure relative strength in stocks that have strong momentum, great core business, and strong financials.
Apple stock is down just 6% from its all-time high, outperforming all of its FAANG peers, plus Microsoft (MSFT) – Get a Microsoft report, nvidia (NVDA) – Get the NVIDIA company report, Tesla (TSLA) – Get a Tesla Inc . report and more.
This prompted merchants to buy on Apple’s dip, which became a more question “How big is the drop” versus “Will Apple stock drop?”
Trade Apple Stock
In December, all the talk was about Apple shares hitting a $3 trillion market cap. Instead, it ended in January.
We were fortunate enough to find the stock in a rapid decline in mid-December when it failed to reach the required level of market capitalization.
However, when Apple stock finally hit new all-time highs, it did so with some bearish divergence in the RSI reading. That led to a lower this week, which pushed Apple down to the 10-week moving average and close to the test low it had a few weeks ago.
All this has bulls wondering what to do from here.
In the case of Apple, I am watching this week’s high at $177.18. Above this mark not only gives the stock the possibility of a weekly turn up, but puts it back above the 10-day and 21-day moving averages.
This opens the door to the $180 to $182 area, followed by an all-time high near $183.
On the downside, the levels are also quite straightforward. In fact, they may be very attractive under the right circumstances.
Watch closely for the $168 level next week. This is the lowest level for this week currently, but it also relates to the 10-week and 50-day moving averages.
A break of this level and a test of these key moving averages, followed by a bounce higher across $168 can It proves to be a profitable and low risk buying opportunity.
However, a sharp breakdown could put the December low and the 21-week moving average on the table near $157.50.