My Real Money Pro colleagute Ed Ponsi published a great article yesterday about the Apple chart, and I wanted to expand upon it.
The recent high level base was on lower volume, which is what you WANT to see after a recent surge (we just had one in October). In fact, you can see that the momentum indicators needed time to turn higher, and that’s just what they have done. The VERY POWERFUL MACD buy signal just occurred (see chart in Ed’s article). Recently, this stock has exhibited the best relative strength than at any other time this year, a characteristic favored by technicians.
Apple volatility (VXAPL) is as low as ever, which means the stock is not expected to make a big move over time. This is usually a safe time to enter a name.
Lastly, the volume on the breakout Tuesday was notable – it was persistent all day long as the price went higher, and the market stayed in place. Follow-through is always key here, so we don’t get faked out of a good play. Given the time of season (it’s “Apple time”), I wouldn’t be surprised to see this surge much higher before year end. Let’s not forget that Apple has lagged the markets during 2013, and remained FLAT for the year. Is it time to play catch up?
