Chart shows Apple stock is collapsing and could be under pressure for months | Wilnesh News
Market heavyweight Apple Inc (AAPL) has started trading range-bound on the back of its major uptrend. On the weekly bar chart, AAPL has its first MACD “sell” signal since January. This reflects a significant loss of medium-term momentum and suggests Apple has entered a correction period that could extend for weeks. The weekly stochastics are also significantly lower as AAPL failed to clear resistance at the July high near $233. This is a setback against the backdrop of a cyclical uptrend framed by the weekly cloud model (shaded area on the chart). According to the daily cloud model (not shown), initial support for AAPL is near $213. Near-term volatility surrounding this week’s Federal Open Market Committee (FOMC) statement may create a knee-jerk rally, but our medium-term indicators ultimately support a breakdown. This would shift our attention to long-term secondary support near $198, the June breakout point. This is a key level on the chart, supported by the 40-week moving average and the weekly cloud model later in the year. We expect buyers to eventually reappear closer to the clouds, respecting the long-term uptrend. Months of headwinds suggest AAPL has developed long-term overbought conditions according to the stochastic oscillator. This creates additional headwinds for Apple in the coming months. The monthly MACD is higher, supporting the cyclical upward trend. The rising monthly cloud model reflects the long-term upward trend, but the overbought downward trend supports the counter-trend trend. AAPL is the largest component of the S&P 500, accounting for nearly 7% of its weight. Therefore, AAPL’s correction phase will be a drag on major indexes, which are already facing weak seasonal periods in September and October. —Katie Stockton and Will Tamplin Get free access to Fairlead Strategies research here. 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