Apple shares popped on Tuesday after their announcement at their World Wide Developers Conference that Apple Intelligence is coming to you soon! No doubt we will see further company announcements in the near term where AI (artificial intelligence, not the rebranded Apple version!) hopes bolster the share price. Will reality bite at some stage? For many companies, of course it will. For others, like the survivors of the dot-com bubble over 20 years ago, any pullbacks in their share price may find buyers stepping up. Right now? New share price highs make some investors happy, and make others very nervous. Apple is now up over 7% year-to-date, chasing the gains of over 14% year-to-date that the XLK (S&P 500 technology sector fund) has posted so far.
The chart below shows the weekly share price and the 13 and 50-week moving averages. The latter turned into a bear cross in April this year but are close to crossing higher again. The share price is knocking on a rising line drawn off recent highs now. This line is a marker of potential supply coming into the market in the past along it, and if broken on a sustained basis it will have implications for investor sentiment. Of note is that the break higher in April 2023 through the falling resistance line (yellow) held. This break higher has swing targets around $250. A different measuring pattern (height of the consolidation pattern extended from the break out point) points to $220 ahead of this. Key support is now at the lows of the week – it would be very disappointing for bulls to see this lost. Further chart support is at the 13/50-week moving averages below this, with the $165 area key support below these (and then the falling yellow line). Calling tops in shares and equity market indices is never easy and it is usually best done in hindsight.
Long-term equity market chartists often look at semi-log charts in order to focus on percentage gains, rather than price moves which can distort the picture. In this case (chart below), the big gains were over a decade ago and the current moves higher are small beans. Fair enough. See if the beans continue to build over time.
Gerry Celaya, Chief Strategist
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