Apple shares could be in for an uptrend, as price formed a short-term double bottom pattern on its 1-hour time frame. After a couple of failed attempts to break below the $108/share major psychological level, price pulled up to the $114/share resistance, which is the pattern’s neckline.
A break past the resistance could confirm the potential rally, as Apple shares might be in for a move up to the previous highs near the $120/share level. A pickup in risk appetite might be enough to trigger more gains for the stock price, which also appears to have found support on the longer-term moving averages.
Apple Shares Outlook
On the other hand, if the $114/share level holds as resistance, price could make another move back to the near-term support at $108/share and create a triple bottom pattern, which is still a valid reversal signal. Lack of direction in the coming weeks and market uncertainty could lead to consolidation for Apple shares.
Last week, the US jobs release led to gains for Apple shares as underlying weaknesses indicated that the Fed might not be ready to hike rates soon just yet. While the report printed a higher than expected headline reading, the participation marked another decline and wage growth was absent. For US equities, this could mean a longer period of low interest rates, which might be enough to support company growth in the foreseeable future.
Bear in mind that Apple shares and other US equities have been on edge as the Fed has been dropping hints about tightening monetary policy later this year. If that happens, higher borrowing rates could make business investment and expansion more expensive, limiting their profitability and growth. Risk appetite for these higher-yielding assets tends to pick up when US reports fail to impress, as these might prevent the Fed from tightening too soon.
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