Is Apple a buy right now? Somebody asked this question recently, so I’ll attempt to answer it.
Long/mid termed perspective
From the longer termed perspective, Apple is on trend (Phase 2 uptrend). Its above its 200 day (40 week) MA, it’s still hanging on to its trendline (although the current sideways pattern and recent selloff within that pattern seems to be endangering that a bit), and it’s not made a lower low (ignoring the wick of the candle which represents a shorter termed one day blip on the stock – see daily chart below). On the minus side–you will note the divergences in MACD and RSI. This type of divergence happened in 2012 – thereafter it put in a “Phase 3” top (read my book Sideways or click here for a video on the 4 market Phases).
The current pattern remains on trend, but it’s a situation that must be watched for a violation of any of these factors (trendline, lower low, or 40 week MA). Remember my “3 bar” rule—ignore the short termed spikes. If a violation occurs, wait 3 weeks to draw a conclusion.
Shorter termed factors
The daily chart above shows us a close-up view of the sideways trading range. An increase in moneyflow momentum (top pane) may be encouraging, but the cumulative moneyflow indicator (bottom pane) needs to break the downtrend. Stochastics and RSI have hooked down without a clear bottom yet – the neartermed action is expected to be bearish. The middle pane shows us comparative strength vs. the S&P500. It’s been moving sideways in tandem with the broad markets. Nothing exciting here.
Would I buy AAPL right now? Nope.
I’d consider it if it broke the current sideways range and took out $134. I’d want so see some moneyflow back such a breakout. AAPL is a watch candidate, but not a buy candidate at this time.
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A better bet would be TWTR. Great chart!
TWTR? Not a good chart from what I see–small potential for support at current levels to hold. We’ll see. I would wait and see–nothing bullish on it yet.
The problem with the three bar rule on the weekly chart of apple is that after waiting three weeks you may have missed most if not all of the move to the downside.
3 weeks for a longer trader, 3 days for a shorter trader.