Medium term
Trade view / 01 September 2016 at 9:40 GMT

Apple product launch bonanza could spur move up

Trader /
United States
Instrument: AAPL:xnas
Price target:
Market price:

Shares of Apple offered active investors and traders a good reward to risk opportunity on the long side following the July earnings report. Over the past couple of weeks the stock is once again in consolidation mode as the next big product event looms on the horizon on September 7. Here is some perspective.

When I last offered a trade idea in shares of Apple on August 4 I discussed that upon a break past 'diagonal' technical resistance the stock has an upside price target in the $110-112 range. By mid-August this upside target was reached and this swing trade concluded profitably.

While AAPL stock remains in its longer-term uptrend, the intermediate-term trend since the May 2015 highs has been decidedly lower with the stock forming a well-defined series of lower  highs. The August rally in the stock did break it back above diagonal resistance from the 2015 highs and from a momentum perspective the MACD oscillator is just beginning to curl higher. Through this lens the stock could indeed continue to ascend in coming months. 

Apple Inc.
Source: eSignal

On the daily chart we see that although the stock has been pulling back over the past couple of weeks, the damage done so far is of little significance and in fact just has the stock pulling back toward the previous diagonal resistance line, which now could turn into support. Very simply, I would not be looking to blindly jump the gun and buy AAPL stock here without a significant daily bullish reversal for the risk of a gap-fill of the August up-gap near $96.50 is one that cannot be discounted just yet.

Apple Inc.
Source: eSignal

Management and risk description

Traders looking at AAPL stock at this juncture must ask themselves whether it is worth taking a stab at the stock in either direction ahead of next week's September 7 product event. Personally I try not to get ahead of such events but rather am looking for a potential bullish reversal following the event that could offer me a better reward to risk entry on the long side.


Entry: buy the stock or CFD upon a bullish reversal and successful re-test of previous resistance (i.e. the diagonal line on the charts above).

Stop: $103.

Target: $115.

Time horizon:  3-5 weeks.

— Edited by Martin O'Rourke

Non-independent investment research disclaimer applies. Read more
AlexF AlexF
Hi Serge did the action on Friday validate your entry in aapl ?
Serge Berger Serge Berger
Hi, I would like to see how the stock trades on Tuesday in the morning session but yes the Friday price action looks promising so far


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