Stock quotes in this article: COST, AAPL
Let’s take a look at the AAPL charts and what that might mean for the broader averages.
In AAPL’s daily bar chart, below, we can see that stocks have risen steadily since a low in June. Prices traded higher in an increasingly tight pattern – a rising wedge, I believe. Trading volume has declined since early July and is typical of this pattern.
The daily On-Balance-Volume (OBV) line increased from mid-June. This is a positive, but it only slightly exceeded the high from the end of March.
The Moving Average Convergence Divergence (MACD) oscillator is above the zero line, but it looks like the two moving averages that make up the oscillator have started to narrow. This is an early warning of a potential reversal. Speaking of reversals, the Thursday candle pattern could be a spinning top or a doji that could be part of a higher reversal pattern.
In AAPL’s weekly Japanese candlestick chart below, we see a mixed picture. Prices have moved higher and are now trading above the 40-week moving average.
The weekly OBV line shows a slight improvement from June to July. The MACD oscillator moved higher for a cover short buy signal.
In this daily point and pattern chart from AAPL, below, we can see that the stock has reached a price target in the $167 area. Hitting a price target can motivate technically oriented traders to become profit takers. The volume at the price bars (left scale) suggests that there may be significant overhead resistance.
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