APPLE Technicals Behavior
August 2 ( From TradingView )
August 2: 200 DMA and August Seasonals: Molotov Cocktail ?
One of the surprise in July was not the expectations built going into ER (Earnings
Release) but the poor performance of Apple Shares til the end of of the month.
That bring the fact that a lot of technical damage have been done:
1) We broke on July 31 the Weekly Support Trendline then at $123.48 of an Uptrend
Channel that started back in the week of July 6
2) More importantly: We broke on July 31 the Monthly Support Trendline then at
$125.89 of an Uptrend Channel that
started back in the month of April 2014
You can find the Charts here: APPLE Technicals - Monthly Weekly Levels - AAPL
I can handle the broken Weekly Support Trendline, but NOT the Monthly one.
So we broke the Monthly Uptrend Channel that started back in April 2014;
a huge change in technicals for Apple Shares.
The only way to invalidate that is to have a Monthly close in August above the $129.48 level...
That bring the next Daily Critical level for Bulls: the 200 DMA ( Day Moving Average ):
We need to stay on a daily close above the 200 DMA now at $ 120.75.
The risk of breaking the 200 DMA can bring a gap down towards the 103 to 106 handle within the next few weeks. So you understand how crucial it is indeed...
Now back to Seasonals to see it it help or not the price action of Apple Shares in August.
The Month of August is also very special in terms of Seasonalities as the whole Market
Trend is in the Bleed Trade Pattern to finally close below the beginning of the month
for the Mighty SP500 Index. SO Bad Technical Pattern it is for the month of August. Read: SP500 Index Seasonalities - Cloudy August ?
See the chart below.
RV closed on July 31 at 2.29, well above it s 200 DMA at 1.84 and pure Volatility closed at 27.7% on July 31, level at its 200 DMA at 27.6%. Volatility trend til Earnings Release is higher.
What I am telling you is that Volatilty and Relative Volatility seems to be on the expensive side considering the Seasonality in August... BUT IF we break the 200 DMA, that will spike up fast...
You can see a Chart of Daily Performance Index in % of Apple Shares Volatility VIX from CBOE
The Weekly August 1 126 Straddle ( Long Call and Long Put ) closed on June 30 at $3.11 and
I will follow that straddle this week...
The best technical set up for me is to break the 200 DMA, puke down violently and clean the market from weak hands and squeeze back tremendously therafter. Knowing that seasonals are weak til August 11 increase the risk of breaking the 200 DMA til then. IF so, it will be a very nice opportunity to get back in Apple Shares at cheap prices.
Stay tuned as I will update you in the Daily as usual for specific trading levels on Apple Shares...
Daily Chart - Seasonalities - Relative Daily Performance Index in % of Apple Shares vs SP500 Index
- Average of the past 5 years - August 1st pegged at 100
( See chart below )
Daily Chart - Seasonalities - Daily Performance Index in % of Apple Shares - Average of the past 5 years
August 1st pegged at 100
( See chart below )
Daily Chart - Seasonalities - Daily Performance in % of SP500 Index - Average of the past 5 years
August 1st pegged at 100
.( See chart below )
For Apple, this is quite different as shown by the chart below.
But in fact, what it is important for us to know is the Relative Outperformance of Apple Shares that historically start on August 11 til August 20 according to the past 5 years as shown by the chart below.
So in summary, we comes from the month of June which historically speaking we had some bad performance from the SP500 Index and Apple to a Month of July which we had on average over the past 5 years good performance... August is quite bad though...
Monthly Seasonalities - Monthly Performance in % of SP500 and Apple Shares - Average of the past 5 years
April May June July August
SP500 +1.2% -2.3% -0.6% +1.9% -1.5%
AAPL +3.8% +1.1% -2.7% +8.0% +3.4%
AAPL over SP500 +2.6% +3.4% -2.1% +6.1% +4.9%
Interesting to note that this year for the month of July 2015, we had -3.3% and +1.9% monthly performance respectively for Apple Shares and the Mighty SP500 Index, well below of the average performance of the past 5 years for Apple Shares as shown on the table above.
So my message here is that in terms of Relative Performance, the month of August is far better than April or May for Apple Shares Historically speaking AND Individual Performance is a positive for the month of August as shown by the table above.
August is historically the second best relative monthly performance for Apple Shares based onthe average performance of the past 5 years ...