Why Apple Stock Looks Set To Bounce Back: A Technical Analysis

Apple Inc AAPL is expanding its pursuit to tap into the health and wellness industry by developing advanced technology for its AirPods, it was revealed on Thursday. The multinational tech giant is creating prototypes of the device that measure core body temperature, monitor posture and enhance hearing.

Last month, it was reported Apple was developing features for its iPhone to diagnose a variety of neurodegenerative conditions such as depression, anxiety and cognitive decline. The Apple watch already includes a variety of health monitoring features such as high/low heart rate notification, irregular rhythm notification and an ECG app.

Apple’s stock has been run down since making a Sept. 7 all-time high of $157.26 amid overall market weakness but has developed into a healthy pattern that could boost it back up for another run.

See Also: How to Buy Apple Stock Right Now

The Apple Chart: After making the new all-time high Apple attempted to bust through the level on Sept. 8 but was rejected, which created a bearish double top pattern on the daily chart. The stock then fell into a steep downtrend, losing about 12% of its value before bouncing.

In its downtrend, Apple created a falling wedge pattern and on Oct. 6 the stock tested the lower descending trendline of the pattern and bounced. Apple then bust up bullishly through the top of the pattern and on Oct. 11 created a higher high on the daily chart, which was the first indication the downtrend was over.

On Wednesday, Apple printed a bullish hammer candlestick indicating a move to the upside was likely in the cards for Thursday. The candlestick also marks the higher low on the chart, which further indicates Apple has reversed into an uptrend.

The next course of action will be for Apple to create a second higher high above the Oct. 11 high of $144.81.

• Bulls want to see big bullish volume drive Apple’s stock up over the $145 level, which will allow the stock to regain the 200-day simple moving average as support, which will indicate overall sentiment has turned bullish. The stock has resistance above at $144.53 and $147.79.
• Bears want to see big bearish volume come in and drop Apple down below Wednesday’s low-of-day and then back below the upper descending trendline of the wedge to negate the uptrend. Apple has support at $141.37 and $135.47.

Photo: Andy Wang via Unsplash