After a strong bullish move we've seen pretty much all year long on Apple (NASDAQ:AAPL) we are now seeing a pullback here last few weeks.
Well, pullbacks aren't bad, and actually pullbacks are welcomed because without pullbacks there is no uptrend.
So the question is, it this just a pullback before cultivating 'higher low' for the continuation to the upside or is this a pullback that could lead to a further selling; possibly a steeper correction.
MACRO CHANNEL
This macro rising-channel has been established since the 2012 September crash and July 2016 turmoil, and here we are today retesting the channel-resistance once again (see arrows) - this is the level that is making the investors very uncomfortable and jittery.
Well, to be fair, resistances and supports get tested all of the time in the market,; question is, how strong is the resistance this time around.
The allegedly formed 'double top' has NOT yet been confirmed as long as the price stays above 142 - 140 level, so we can't call it that yet - however, it will be troublesome for this stock when it does confirm. So 142 - 140 level is a important level for the buyers to protect if they do not want the bears to go wild.
NEGATIVE DIVERGENCE
Tough look here, especially this divergence is forming on top of the channel-resistance we've just talked about on this post.
This divergence absolutely demolished Apple (AAPL) back in September 2012 as the stock plunged almost 50% just within 7-months.
Well, the demon is back forming this negative/bearish divergence today on all of my oscillators as you can see in the chart below.
We do have 'initial' confirmation on the oscillators but we don't have the full confirmation on the price-action yet.
So, again, 142-140 level is going to be a crucial level for the buyers to protect and possibly even nullifying this signal - yes, I've seen divergences get nullified so I believe the bulls still have chance to turn things around.
However, if they fail to protect 142-140 and gets below this level, we may see a full length of this negative divergence playing out (meaning, the oscillator could come all the way back down to the bottom of the band).
I don't have any positions on AAPL as of today and I just on the sideline to see how it's going to deal with these signals.
*This article was also originally posted on my blog. Traders Club