Apple’s stock suffered a sharp drop in September, falling by more than 20% from its all-time highs before finding support near the 104.30 level and the lower Bollinger band. The price then rebounded somewhat, crossing back above the 50-day simple moving average (SMA), which is encouraging as it suggests this might have been just a correction after an explosive move higher since March.
Momentum oscillators paint a mixed picture, with the RSI reflecting the latest recovery but the MACD continuing to retreat in its negative zone.
Should the rebound continue, the first obstacle to the upside might be the 118.30 region, which also encompasses the 20-day SMA. The 20-day average provided consistent support on the way up, so a move back above it would be a positive signal. If so, the next target for the bulls may be the 128.60 zone.
Now if the bears wrestle back control and push the price back below the 50-day SMA, the stage would be set for another test of 104.30. If violated, the psychological 100.0 level could come to the rescue, ahead of the 93.30 area.
Summarizing, the correction has been sharp, but that is natural after such a relentless uptrend, and this doesn’t look like a trend reversal yet. For the broader outlook to shift to neutral, from positive currently, sellers would need to punch below 89.30.
