On Tuesday, Apple, Inc (NASDAQ: AAPL) broke up bullishly from an inside bar pattern Benzinga pointed out on Monday. The stock has been working to erase the losses caused when Apple printed a fourth-quarter revenue miss on Oct. 28, which caused the stock to fall about 4% the following day before rebounding.
Apple has also seen some unusual option activity, and on CNBC’s “Halftime Report,” Pete Najarian noted traders had purchased 50,000 call contracts with a strike price of $152.50 and a Nov. 5 expiry. At the time Najarian made the comments, Apple was trading at about $148, but by late morning the stock had already soared up about 1.5% higher over the $150 level.
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The Apple Chart: Apple broke up from a falling wedge pattern on Oct. 6 and began trading in an uptrend. The move was propelled by Apple reacting bullishly to a double bottom pattern created when paired with the price action on Oct. 4, where the stock hit and bounced up from the $138.27 mark.
Since breaking up from the patterns, Apple has traded in a fairly consistent uptrend, aside from bearish earnings reaction. Apple’s most recent low sits at the $148.49 level and the most recent higher high is at $153.17. Apple will need to create a higher high above the level in the coming days to continue the trend.
Apple is trading above the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending above the 21-day, both of which are bullish indicators. The stock is also trading above the 50-day simple moving average, which indicates longer-term sentiment is bullish.
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Bulls want to see sustained big bullish volume push Apple above the Oct. 26 high of $150.84 and then for the stock to make a higher high. Apple has resistance above at $152.40 and near the $154 area. Beyond the levels, there is no further resistance until the all-time high of $157.26.
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Bears want to see big bearish volume come in and drop Apple down below the $150 level, which could put it in danger of losing support at the eight-day EMA. Below the levels the stock has further support at $147.79 and $144.53.
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