As one of the top two largest market cap stocks in the world, and one of the highest weighted stocks in large cap US and global indices, Apple (AAPL) can be seen as one of primary bellweather stocks for equity markets. After a relatively slow start to the year, Apple spent most of 2023 in the green zone of the SIA S&P 100 Index Report, particularly from April through to the end of last year. Apple kicked off 2024 by dropping out of the green zone into the Yellow Neutral Zone and it has been steadily sinking back down the rankings since then. This decline suggests that investors may be taking profits in big caps, particularly in Technology and rotating capital down the food chain or out to other sectors. Over the last month, Apple has dropped 17 positions to 38th place. Apple (AAPL) spent much of 2023 under accumulation, advancing from near $125.00 toward $195.00 over a period of about eight months. A normal pullback found support near $165.00, but in the ensuing rally, the shares faltered just short of the $200.00 round number, setting up a potential bearish double top failure.
Since the start of this year, the shares have started to slump back, taking out their 10-week moving average which has reversed polarity to become initial resistance. Currently, the shares are testing $180.00 support. If that gives way, a retest of the October low and current channel bottom would look increasingly possible with next potential support after that in the $150.00 to $155.00 area.
Although perhaps it didn’t seem like it at the time, an eight-month rally in Apple (AAPL) shares came to an end in August and since then, they have been grinding sideways, consolidating their previous gains. Following an initial correction, the shares bounced back toward the end of the year. They were unable to overcome resistance at the top of the current $166.00 to $198.00 trading range and have started to slump back again, recently staging a 3-box reversal.
It would take a close above resistance near $198.30 and perhaps really the $200.00 round number to complete a pending spread triple top pattern and signal the start of a new upleg, with next potential resistance near $214.65 based on a vertical count.
Should the current pullback continue, initial support may appear at previous lows near $172.60 to $165.90. A close below the bottom of the channel would complete a pending spread double bottom pattern with next support at a prior low near $156.35.
With a bullish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 7 out of 10, AAPL is exhibiting short-term strength across the asset classes.
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