AAPL 9/25/2013 – This Apple is Ready to be Picked
Apple's (AAPL) candlestick stock chart has been flashing several bullish signals lately. Today I want to revisit some of the signals from a moving average perspective, with a dash of Fibonacci and then stir in a little volume analysis.
So let's start by reviewing some of those bullish signals on this first chart, which is a 3 month daily candlestick chart.
- The golden cross for Apple occurred September 11, 2013. This is typically a bullish signal.
- The day of the shaded box, in my Apple update for that day mentioned I thought there were approximately 2 days left in Apple's correction based on the Fibonacci ratio of up days to down days. There was a day and a half left.
- Apple re-took the 20 day moving average line on big volume creating a gap-up, as indicated by the arrows on the chart. This is a bullish move, especially since the gap-up occurred right after a dark cloud cover formation. It looks like the "market" wanted people to sell end of day based on the dark cloud cover formation, only to leave them buying back shares higher over the last 3 days. That is the danger of trying to flip shares. My best results have come by showing a little patience, especially when I see lots of bullish signals.
- The last 2 days of a downtrend have come on decreasing volume, indicating that there is no selling pressure. It looks more like a hunt for shares.
Based on the above chart, it appears that Apple may have 1 more day of weakness, possibly filling the rest of the gap at $478.55 even. Maybe a hammer candlestick formation will form tomorrow as the last day of this current downtrend. I think I will use this temporary weakness tomorrow to purchase the rest of my Apple shares, as long as I do not see significant selling pressure throughout the entire day as I watch the daily 5 minute candlestick chart. I want to see Apple start to rebound at some point tomorrow, possibly show some end of the day strength. Regardless of how it plays out though, there is not anything that is alarming to me at this point or wanting me to sell any of the shares that I have been accumulating for a bigger move, like the one I show in the next chart.
Based on the aggressiveness of Apple's share buyback program in the latest quarter as well as what appears to be increasing iPhone sales, I do not see any reason why Apple should not approach the $575 target price area.
Disclosure: I am long Apple shares for an average cost basis of $478.79. I now own approximately 85% of the total Apple shares that I want to own. I intend on making my last Apple purchase tomorrow on any weakness or if the gap is filled.