Apple Stock Consolidates For Another Bullish Break: A Technical Analysis

Excitement has been building in Apple Inc’s AAPL stock as the company nears the release of its latest iPhone 13 models. Bloomberg reports Apple’s new generation of 5G smartphones will come in four models, similar to the iPhone 12 portfolio, but will have an increased number of updates. The tech giant plans to build a record 90 million units of its next-generation iPhones by year end.

According to CIRP data, Apple increased sales at its retail locations by 27% for the second quarter after being able to fully reopen. The agency also reported increased consumer spending has pushed customers toward more expensive iPhone models.

Enthusiasm over the impending release helped Apple’s stock to make a blue sky run this week reaching a high of exactly $150 on Thursday.

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The Apple Chart: On June 22, Apple’s stock broke up from a bullish triangle on the daily chart and made a 13.53% run to a new all-time high. Apple’s stock flew through two resistance levels at the $137 and $145 levels with little difficulty before topping out at the psychological resistance level of $150.

Since July 1 Apple’s stock has registered a relative strength index (RSI) of over 70%, which put it firmly into overbought territory. On Thursday Apple’s stock reached an RSI of just over 80%, for the second time in less than two weeks, which indicated consolidation was needed. On Friday Apple began to pull back.

The pullback in the stock could form a bull flag pattern just under the new all-time high resistance level, which would help Apple to cool its RSI and allow the moving averages to catch up to the price. Bulls would like to see Apple’s stock trade within the flag for another day or two to gather strength for another push north.

Apple is trading above both the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day EMA, both of which are bullish. Apple is also trading well above the 200-day simple moving average which confirms overall sentiment in the stock is bullish.

lthough the eight-day EMA has moved up close to the share price, Apple is trading about 5% above the 21-day EMA. Further consolidation will allow for the 21-day EMA to catch up.

Bulls want to see Apple’s stock eventually break up bullish from the bull flag to make another blue sky run. With earnings coming up on July 27 after markets close, Apple’s stock could run up into its earnings print.

Bears want to see bearish volume drop Apple’s stock down below the flag pattern and for the stock to lose support of the eight-day EMA. If Apple were to lose the level as support it could fall back under the $145.08 mark.

AAPL Price Action: Shares of Apple were trading down 1.5% to $146.25 at publication time.