Apple shares are showing signs of retreating from its recent highs, indicating that a quick correction may take place before it resumes its climb. Since the stock split earlier this year, Apple shares have been on a very strong uptrend, climbing to the $96/share area over a couple of months from the $80/share level.
MACD is reflecting overbought conditions, as the rally has been overextended already. This is a sign that a short-term drop might take place unless a fresh catalyst boosts it higher, such as strong earnings report from tech companies including Apple itself.
RSI is also showing a buildup of selling momentum, as the oscillator looks ready to head back down. This could lead to a small retreat for Apple shares until the $90/share major support area.
Apple Shares Outlook
Further gains for Apple shares, should the strong uptrend resume later on, could see prices up to the $100/share resistance level. Buying interest has been sustained, particularly as the keynote address date draws closer and investors speculate about new Apple products and software set for release.
Bear in mind though that this event might lead to a quick dip for Apple shares as some traders liquidate their positions if they’re not to impressed with the releases. For the longer-run though, it appears that the strong buying momentum for this stock might carry on as it remains one of the leaders in the tech sector.
Risk sentiment in the financial markets has been a key driver of price action so far, as bleak earnings from some US companies have weighed on risk appetite while the debt troubles in Portugal are threatening to bring risk aversion back in the game again. Should this to prove just to be a one-off event, positive risk sentiment might be able to lift equities once more.
To contact the reporter of the story: Jonathan Millet at john@forexminute.