Wednesday, August 14, 2013

Apple stock price update: How quickly sentiment can shift....

A couple weeks ago after Apple reported it's latest quarterly earnings, we posted an update on the stock price and what the technical setup appeared to be. We were near term bullish for technical reasons and at that point the stock price was trading around $418. Today we have seen the stock price rise back up above $500 a share for the first time since January. A big reason may be Carl Icahn's announcement yesterday via twitter that he indeed has a large stake in the company.

Taking a current look at the technical picture it appears as if the stock price is headed back up to retest that broken trend line that is depicted in the top most chart above.

The second chart is a daily chart showing a clearer picture of the near term trend. I expect shares of Apple to trade in the $545-$555 range as the next near term target. As annotated on the chart, there happens to be a few key confluence elements that come into play. The midpoint of the drop from all time highs, estimated top of next trading range and broken long term trend line all line up in this range.

It appears some of the excitement in Apple is starting to come back again. I really have no idea if we will see new all time highs again anytime soon. However if we can trade above that $545-$555 range for any length of time that would be a very good technical sign for the future of this stock price. Until then I think it is prudent to not get too sucked into these extreme sentiment shifts in either direction.