How Apple, Microsoft and Nvidia Stocks Are Reversing Course And What To Watch For

Apple, Inc AAPL, Microsoft Corporation MSFT and NVIDIA Corporation NVDA have all recently reversed course into uptrends. An uptrend occurs when a stock makes a series of higher highs and higher lows on the chart.

The higher highs indicate the bulls are in control, while the intermittent higher lows indicate consolidation periods. Traders can use moving averages to help identify an uptrend with rising lower-frame moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term uptrend and rising longer-term moving averages (such as the 200-day simple moving average) indicating a long-term uptrend.

A stock often signals when the higher high is in by printing a reversal candlestick such as a doji, bearish engulfing or hanging man candlestick. Likewise, the higher low could be signaled when a doji, morning star or hammer candlestick is printed. Moreover, the higher highs and higher lows often take place at resistance and support levels.

In an uptrend the "trend is your friend" until it’s not, and in an uptrend there are ways for both bullish and bearish traders to participate in the stock:

• Bullish traders who are already holding a position in a stock can feel confident the uptrend will continue unless the stock makes a lower low. Traders looking to take a position in a stock trading in an uptrend can enter and usually find the safest entry on the higher low.
• Bearish traders can enter the trade on the higher high and exit on the pullback. These traders can also enter when the uptrend breaks and the stock makes a lower low, indicating a reversal into a downtrend may be in the cards.
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The Apple Chart: Apple reached a high of $147.47 on Friday and regained the eight-day exponential moving average (EMA) as support. The stock will need to make a higher low in the future as it continues its uptrend. Apple has resistance above at $147.79 and $150 while it has support below at $144.53 and $141.37.

The Microsoft Chart: Microsoft made a higher high on Thursday at the $300.90 level and on Friday may have put in the higher low at $296.93 when it printed a hammer candlestick. Microsoft has resistance above at the $301.50 level and above at its Aug. 20 and Aug. 24 all-time high of $305.84. The stock has support below at $298.20 and $296.93.

The NVIDIA Chart: Nvidia reached a high of $225.35 on Thursday and may have put in the higher low on Friday when it consolidated down to the $218.61 level and printed a doji reversal candlestick. Nvidia's only resistance above is at its all-time high of $230.43, and it has support below at the $219.77 and $208.75 levels.