Apple shares had been moving sideways ever since the company came at odds with the FBI. However, the recent improvement in market sentiment led to an upside breakout as traders pursued higher-yielding assets.
Price broke above the resistance at $100/share and rallied close to $104 before showing signs of a correction. Applying the Fib tool on the latest swing high and low shows that the former resistance is around the 38.2% to 50% levels.
The 100 SMA just crossed above the longer-term 200 SMA to confirm that an uptrend is taking hold. In addition, these dynamic support levels line up with the 61.8% Fib, adding to its strength as a potential floor.
Meanwhile, stochastic is on the move down to show that profit-taking might still be taking place from the recent rally. RSI seems to have room to go down as well so price might follow suit until the oscillator indicates oversold conditions, drawing buyers back in the game.
However, a break below the 61.8% Fib could put Apple shares back on track towards testing the range support at $92.50/share. A move below this level could keep the longer-term downtrend intact.
Weak trade balance data from China released earlier today might weigh on Apple shares trading during the US session, as this confirms that the world’s second largest economy is slowing down. Both imports and exports posted double-digit declines.
Keep in mind that Apple has been reporting softer sales and revenues data for its iPhone units, encountering stiffer competition from Asian counterparts that offer the same features at much cheaper prices. Still, several analysts have retained a “buy” holding for Apple shares.