Long considered a stock market leader, Apple (AAPL) – Get Apple Inc. Report stock is looking a little more vulnerable lately.
I guess that doesn’t come as too much of a surprise, seeing as though the Nasdaq is being tugged lower on the fear of rising interest rates and the market as a whole continues to struggle.
Still, Apple is a stalwart of strength among mega-cap holdings. It’s not necessarily because of the success of its App Store nor the potential of it being the “master of the metaverse.”
Instead, I think it’s pure relative strength in a stock that has strong momentum, a great underlying business and strong financials.
Apple stock is down just 6% from its all-time high, outperforming all of its FAANG peers, as well as Microsoft (MSFT) – Get Microsoft Corporation Report, Nvidia (NVDA) – Get NVIDIA Corporation Report, Tesla (TSLA) – Get Tesla Inc Report and more.
That has traders looking to buy the dip in Apple, which is becoming more a question “how big of a dip” vs. “will Apple stock pull back?”
Trading Apple Stock
Daily chart of Apple stock.
Chart courtesy of TrendSpider.com
In December, all the talk was Apple stock hitting a $3 trillion market cap. Instead, it ended up happening in January.
We were lucky enough to have caught the stock on the rapid dip in mid-December when it failed to hit that coveted market cap level.
However, when Apple stock did finally make new all-time highs, it did so with some bearish divergence on the RSI reading. That led to this week’s dip, which sent Apple down to the 10-week moving average and a near-test of the low from a few weeks ago.
This all has bulls wondering what to do from here.
In Apple’s case, I’m keep an eye on this week’s high at $177.18. Above that mark not only gives the stock the potential for a weekly-up rotation, but puts it back above the 10-day and 21-day moving averages.
That opens the door to the $180 to $182 area, followed by the all-time high near $183.
On the downside, the levels are also quite clear. In fact, they may be quite attractive under the right circumstances.
Keep a close eye on the $168 level next week. Currently that’s this week’s low, but it’s also about where the 10-week and 50-day moving averages come into play.
A break of this level and a test of these key moving averages, followed by a bounce back up through $168 could prove to be a lucrative and low-risk dip-buying opportunity.
However, a severe breakdown could end up putting the December low and 21-week moving average on the table near $157.50.
