Benzinga - by Melanie Schaffer, Benzinga Editor.
Apple, Inc (NASDAQ: AAPL) was charging over 2.5% higher at one point Tuesday, helping to hold the S&P 500 flat after Moody’s issued a decision to lower China’s credit outlook from stable to negative.
From a technical analysis standpoint, the big-tech giant was breaking up from a bull flag pattern on the daily chart, which could ultimately propel Apple to new all-time highs if a Santa Rally swings into full force.
Apple’s move higher was also helping to set up bullish chart patterns on several ETFs that hold the stock, specifically The MUSQ Global Music Industry ETF (ARCA: MUSQ), the latter which was continuing to hold a bull flag pattern that Benzinga called out on Thursday.
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Apple’s Music Division: While the largest chunk of Apple’s revenues come from its products, the company’s services division, which includes Apple Music, online subscriptions such as iCloud and warranties from AppleCare, shone brightly in its fourth-quarter earnings. For that quarter, the company generated revenues of $22.31 billion, an increase of 16.29% year-over-year and up 5.19% from the third quarter.
The increase isn’t surprising considering that the music streaming service is booming. The worldwide music industry’s valuation, excluding live shows, hit $41.5 billion last year, according to Digital Music News, which cited a report by former Spotify Technology S.A. (NYSE: SPOT).
In terms of the music industry’s future, last year, Goldman Sachs raised its projections, forecasting the industry will be worth a staggering $151.4 billion, including live shows, in 2030, led by music streaming, which the firm said in its “Music In The Air” report that it believes “will be resilient in an economic downturn” and “shows no sign of saturation.”
Looking To Capture A Piece Of The Music Industry? MUSQ seeks investment opportunities in key segments of the global music industry, targeting areas that hold significant appeal. The fund provides concentrated exposure to the complete music ecosystem, covering streaming, content and distribution, live music events and ticketing, satellite and broadcast radio, equipment and technology, and artificial intelligence—embracing all aspects of the music world.
MUSQ’s top five holdings also provide diversification to investors, with each of the companies involved in music and various other sectors. The top five holdings within the fund are Amazon.com, Inc (NASDAQ: AMZN) weighted at 7.57%, Apple, weighted at 7.17%, Alphabet, Inc (NASDAQ: GOOGL), weighted at 6.24%, Sony Group Corporation (NYSE: SONY), weighted at 3.42% and Spotify, weighted at 2.80%.
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The Apple Chart: Apple’s bull flag formed between Oct. 27 and Tuesday, with the upward-sloping pole formed between Oct. 27 and Nov. 22 and the flag forming since. The measured move, if the stock breaks up from the bull flag on high-than-average volume, is about 16.5%, which suggests Apple could enjoy a blue-sky run toward the $218 mark.
- When Apple started to break up from the bull flag on Tuesday, the stock negated its downtrend within the flag but hasn’t yet confirmed a new uptrend with the formation of a higher low. Traders who aren’t already in a position can watch for the stock to eventually retrace and form a bullish reversal candlestick, such as a doji or hammer candlestick, to enter a possible position.
- Bearish traders want to see the stock reject the previous all-time high of $198.23, which would cause the stock to form a bearish double-top pattern at that level.
- Ideally, bullish traders want to see a higher low form or sideways trading to lower Apple’s relative strength index down under the 70% level before another big run to the upside occurs.
- Apple has resistance above at $194.48 and at the all-time high and support below at $189.62 and at $184.95.
The MUSQ Chart: MUSQ attempted to break up from its bull flag on Friday but on Monday and Tuesday, the ETF retraced and was consolidating with a double inside bar pattern. The pattern leans bullish for a continuation higher in this case because MUSQ is trading in an uptrend on larger timeframes.
- When MUSQ retraced on Tuesday, the ETF was holding above the eight-day exponential moving average (EMA) on the daily chart, which is bullish. The ETF’s eight-day EMA is also trending above the 21-day EMA, which is a positive signal.
- Bullish traders want to see big bullish volume come in and break MUSQ up above Monday’s high-of-day, which will confirm the uptrend remains intact and also negate a possible double top pattern the ETF formed near the $24.30 mark on Nov. 24 and Monday.
- Bearish traders want to see big bearish volume come in and drop MUSQ down under the 21-day EMA, which could force the ETF to retest the 50-day simple moving average as support.
- MUSQ has resistance above at $24.34 and at $25.21 and support below at $23.30 and at $22.65.
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