Technical Update - Apple closed higher but indicators spell trouble ahead. Can Apple reverse them?
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Apple reversed the initial lower After Market price Thursday powering higher in normal session Friday, spiking above 100 SMA to closed above 55 Simple Moving Average (SMA) .
However, Apple seems to have hit resistance around $157.35, and around the 0.50 retracement of the August -September down trend. For Apple to keep momentum and adding to it the share price needs to close above 157.50. If that scenario plays out Apple could move to around 164-167. However, there is no strong resistance until around 176.
However, interestingly despite the strong move Friday daily RSI did not close above 60.
Opening lower today below 55 SMA which is declining i.e., the underlying sentiment is negative.
If Apple closes below 144 and RSI closes below its rising trendline bear trend is likely to resume sending Apple below 134.
If that scenario plays out Apple could be testing key medium-term support at $129. A close below will confirm medium term down trend and is likely to fuel a sell-off down to around 120-118. Possibly down to strong support area around 109-104.50
Weekly RSI is showing negative sentiment and is likely to drop back below 40 adding to that picture at the end of Friday’s trading session.
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