Apple shares have been on a tear since March, even breaking past the long-term descending trend line on its daily chart. Price has also broken past the highest 61.8% Fib level, suggesting that a reversal from the downtrend is in order.
For now, the 100 SMA is below the 200 SMA so the path of least resistance might still be to the downside. Also, the 200 SMA is holding as a dynamic inflection point, possibly serving as the line in the sand for keeping gains in check.
Stochastic is already indicating overbought conditions so bearish pressure could come in play. RSI is also in the overbought area, although both oscillators haven’t crossed lower to indicate a return in selling momentum just yet.
With that, Apple shares could be in for more gains, possibly until the next resistance at $120/share. However, if the selloff resumes from here, Apple shares could still revisit the lows at $92.60/share or the nearby area of interest around $102-105/share.
Still, some analysts believe that the market rally is overdone and that Apple shares could have trouble sustaining momentum from here. After all, shares of smartphones are projected to decline and the company could have trouble holding on to its market share in China, especially with growth concerns still in play.
Also, reports that the FBI has been able to de-encrypt the iPhone used in the San Bernardino shootings led to concerns about Apple security, although this doesn’t appear to have been mirrored in Apple shares just yet. Moving forward, global growth concerns could continue to prevent risk-taking from supporting high-yielding US equities while revived risk appetite could spur prolonged gains.
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