Equity rally leaves Apple on the shelf
Kim Cramer Larsson
Technical Analyst, Saxo Bank Group
Summary: Equities are bouncing off their December lows, but Apple shares are struggling to keep pace.
The stock is struggling to recover, and the biggest short-term test for AAPL is whether it can fully close the gap from last week. During a massive move over several days, we often see three gaps: a breakaway gap, a continuation gap and an exhaustion gap.
The gap seen last week seems to be an exhaustion gap which usually is the final step before a (larger) correction. An exhaustion gap will usually be closed within five trading days, but despite AAPL having closed the gap the correction is still struggling to get momentum.
A close above 154.90 could provide the necessary momentum, but it remains to be seen if Apple can actually close above that level. The trend is down, but a look at the Relative Strength Index shows divergence, indicating a correction is due.
Volume also peaked at the current bottom, supporting price exhaustion.
A rejection at 154.90 could lead to a retest of lows while a close above 156.40 would confirm a new uptrend... however long that might last.
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