In the January 18th edition of the Daily Stock Report, we noted that the relative strength of Apple (AAPL), one of the highest market cap stocks in the world and part of the “Magnificent Seven”, was starting to weaken. Since then, Apple has continued to tumble down the rankings in the SIA S&P 100 Index Report dropping 11 spots in the last month.
Yesterday, Apple fell into the Red Unfavored Zone for the first time since February of 2023. Year to date, AAPL shares are down 8.9%, in contrast to gains of 8.5% for the S&P 100 Index and 7.9% for the NASDAQ Composite Index. A major breakdown is underway in Apple (AAPL) shares. Back in February, a rally peaked at a lower high. Since then, AAPL has come under distribution, as shown by the emerging downtrend of lower highs.
In the last three days, it has become clearer that a new downtrend has started. The shares snapped a second downtrend line and then took out $180.00 support, completing a bearish Descending Triangle pattern. These breakdowns have occurred on a big jump in volume, a sign that selling pressure has increased.
Next potential support appears at the October low near $166.00, then closer to $160.00 based on a measured move. Initial resistance appears at the $180.00 breakdown point.
This 1% chart shows how after staging a big rally through the first eight months of 2023, Apple (AAPL) shares seem to be losing their way. Between August and February, three attempts to break through resistance near the $200.00 round number failed. Since the latest peak in February, the shares have started to backslide, with a bearish Double Bottom breakdown signaling that bears have started to gain the upper hand.
Initial downside support appears at the October low of $165.90. Should support fail there, current weakness would change from a correction within an uptrend to the start of a new downtrend. Should that occur, next potential support may appear in the $147.35 to $153.25 zone where previous column highs/lows and a vertical count cluster around the $150.00 round number. Initial resistance on a bounce appears near $190.60 based on a 3-box reversal.
With a bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 5 out of 10, AAPL is exhibiting short-term weakness against the asset classes.
Disclaimer: SIACharts Inc. specifically represents that it does not give investment advice or advocate the purchase or sale of any security or investment whatsoever. This information has been prepared without regard to any particular investors investment objectives, financial situation, and needs. None of the information contained in this document constitutes an offer to sell or the solicitation of an offer to buy any security or other investment or an offer to provide investment services of any kind. As such, advisors and their clients should not act on any recommendation (express or implied) or information in this report without obtaining specific advice in relation to their accounts and should not rely on information herein as the primary basis for their investment decisions. Information contained herein is based on data obtained from recognized statistical services, issuer reports or communications, or other sources, believed to be reliable. SIACharts Inc. nor its third party content providers make any representations or warranties or take any responsibility as to the accuracy or completeness of any recommendation or information contained herein and shall not be liable for any errors, inaccuracies or delays in content, or for any actions taken in reliance thereon. Any statements nonfactual in nature constitute only current opinions, which are subject to change without notice.
