Here's Why Apple Stock May Be Charging Up For A Bigger Run

Apple, Inc AAPL closed Friday's trading session slightly higher after a five-day rebound pushed the tech giant up about 9.5% off the June 30 low of $133.77.

The rebound, which followed a pullback that took place between June 27 and June 30, confirmed Apple was trading in a new uptrend.

An uptrend occurs when a stock consistently 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 time frame moving averages (such as the eight-day or 21-day exponential moving averages) indicating the stock is in a steep shorter-term uptrend.

Rising longer-term moving averages (such as the 200-day simple moving average) indicate 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 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 reversed course on June 16 after bouncing up off the $129.04 level. The stock has since formed a higher high to negate the downtrend and a higher low to confirm the uptrend. The most recent confirmed higher high was printed on June 27 at $143.49 and the most recent higher low was formed at the $133.77 level on June 30.

• On July 6, Apple's uptrend also caused the stock to break up bullishly from a descending trendline, which had been holding the stock down since April 4. When a stock breaks up from a descending trendline it can be a powerful reversal candlestick, although Apple may drop down to test the trendline as support.
• On Friday, Apple closed near its high-of-day price, which caused the stock to print a bullish Marubozu candlestick on the daily chart. If the candlestick is recognized, Apple is likely to trade higher again on Monday, although consolidation will eventually be needed, at least to print another higher low.
• Apple is trading above the eight-day and 21-day exponential moving averages (EMAs) and on Thursday, the eight-day EMA crossed above the 21-day, both of which are bullish signals. Apple was also able to regain the 50-day simple moving average as support, which indicates longer-term sentiment has turned bullish.
• Apple has resistance above at $150 and $153.92 and support below at $146.41 and $143.51.

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