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Is Apple (AAPL) signalling a BUY opportunity for Traders and Investors?

Published 16/04/2024, 07:26

Apple (NASDAQ:AAPL) is stuck in a price range at the moment, just bouncing between the lows around $168, and the highs around $196.50

Double-bottoms, (I like them, I cannot lie) are very powerful bullish signals, even more so when they occur in an uptrend. It’s a bullish signal in a bullish environment.

I wanted to present my case for how bullish APPLE is looking at the moment. Of course, there are no guarantees that this is the next major higher-low, but it’s certainly looking like a solid contender.

Let’s look at the evidence on the charts:

Starting with the Monthly, we see a bullish candle, forming at major support. It’s also a double-bottom within the last 6 candles. Nice.(MACD however, still seems bearish i.e. it’s trending lower.)
Price is also now resting on the 20 simple moving average, which can be a great place for price to find momentum.
Should April close as a small or medium green candle here, that would constitute a bullish sign.

Now, looking at the Weekly chart, to gain more detail and insights, we see a bullish engulfing candle- this is really a big tick in the box for the bulls. It’s also a separate double-bottom within the last 6 weekly candles, so in other words, a double bottom on the weekly AND the monthly.
(MACD however, still trending lower)

Finally, we take a gander at the daily chart, mainly to check the MACD here. Why? Well, what I’m looking for to support my case, is bullish divergence on the MACD, which we are getting here.

Specifically, price is flat along a horizontal support level, but the MACD is trending higher. This implies bullish momentum that ‘should’ persist beyond this last week. Well, for a bit longer anyway.

Why is this technical setup attractive to both investors and traders?
Well, for traders it could offer a short-term, decent reward-to-risk move to the top of the range, at least, while for investors, this could be a major swing low before resuming its general trend higher.

Traders will place their stops below $165 for starters, so that should the price break lower, they’ll exit the trade at a manageable loss.

To track this idea, I’ve created a U.S. portfolio under my profile, and opened a position today. I’ve also placed a limit order on my own accounts.

I’m looking at this as a portfolio investment idea, and taking a 2-5 months approach to it.

Where are the risks here? For traders, a fixed loss if price breaks lower out of the range, and for investors, either a similar loss if they close their position, or it becomes a wait-for-the-recovery approach, meaning that AAPL will ultimately resume its dominance in this sector.
The approaches are highly personal and individual’s should align these with their own risk management styles.

Like this article? Read more from my Investing.com profile here:

Disclaimer: Any content in this article is purely financial markets discourse and not financial advice. Please consult a regulated professional before making any financial decisions.

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