APPLE Technicals Behavior
August 16 ( From TradingView )
August 16: Big Picture: Emerging Concerns
On August 2, I mentioned in my Weekly Research (200 DMA and August Seasonals: Molotov Cocktail ?)
that the month of August is quite special on AAPL. I wrote then: August is historically the second best
relative monthly performance for Apple Shares based on the average performance of the past 5 years ...
The China Devaluation of the Yuan story hit badly Apple Shares. In fact, it is not a China story, it is a Foreign Emerging Currency Story. Over 36% of Apple revenues comes from China and rest of Pacific Region which have seen the biggest growth in Q3 2015 results on a year-over-year basis ( +112% for China and +26% for Rest of Pacific ): Apple Q3 2015 Unaudited Summary Data.
And even more if we include other Emerging Markets...Because of that, all the expected seasonalities pattern have been wrong n Apple.
My Proxy for me is the CEW ETF ( WisdomTree Emerging Currency Strategy Fund ) which is down 15.9% from a year ago as shown by the chart below. That will keep pressure on Apple in terms of growth ( price increases vs market share vs competition ).
RV closed on August 14 at 2.35, well above it s 200 DMA at 1.89 and pure Volatility closed at 30.15% last Friday, level well above its 200 DMA at 27.9%.
What I am telling you is that Volatilty and Relative Volatility is still on the expansive side considering the factors above that can bring Volatility in Apple Shares til the end of the month...
But I expect that it will stay high because of the Volatility in Foreign Currencies and then on Apple Shares...
Looking at the past 5 years, Volatility of Apple Shares tend to rise til August 22:
It is important to know for long term options behavior....
APPLE Volatility Technicals - Daily Levels and Seasonalities - AAPL
The Weekly August 21 116 Straddle ( Long Call and Long Put ) closed last Friday at $3.11 and
I will follow that straddle this week...
So,what it is important for us to know is that we are in a Dead Cat bounce as long as we don t get a daily close above that Large Downward Channel - at $116.97 for Monday August 17 ...
Stay tuned as I will update you in the Daily as usual for specific trading levels on Apple Shares...
Daily Levels - AAPL
200 DMA ( Green Line )
APPLE Technicals - AAPL
My Downward Channel
SInce July 21 ( post Earnings Releses ), we started to trade within a Large Downward Channel. On August 3rd, Apple Shares closed below the 200 DMA then at $120.75, a bad omen technically speaking...
Apple Shares are within a Large Downward Channel that started on July 23 2015 with $107.29 support and $116.97 as resistance.
( see Chart Below ).
On a Daily basis, we need a close above that Resistance Trendline of that Downward Channel at $116.97 ( Blue Trendline - Chart Below ) before thinking of a short term reversal in Apple Shares and after a potential test of the 200 DMA now at $121.46.
For me, we are in a Dead Cat bounce as long as we don t get a daily close above that Large Downward Channel - at $116.97 for Monday August 17 as shown by the chart below ( Ellipse ).
That underperformance of AAPL since July 21 is quite obvious looking at the chart below which is the Ratio of Apple Shares over the mighty SP500 Index- Candles. Observe that we are broke the support trendline from that channel of Relative Performance...
And also the 200 DMA ( Day Moving Average - Green Line - Chart Below ) on July 30. It is crucial that we get back above that 200 DMA level for technical strenght...
RATIO AAPL Stock over SPX ( Cabdles )
200 DMA ( Green Line )
SP500 Index ( Area )
The Big Picture for Apple Shares.
On June 8 week, we broke on a weekly basis the main uptrend channel support then at $127.57 support. SO by breaking that support from the main channel that started back in November 2014 at $127.57, it was a very bad technical sign for me indeed...
Also, on the August 3 rd week, we broke on a weekly basis the downtrend channel at $118.06. ( See chart below )
For the weekly, we are now within a downtrend channel that started on the week of July 6 with $108.40 as support and $124.24 as resistance. See chart below.
We need to get above on a weekly basis the $117.19 level ( which is the old weekly downtrend channel resistance level now ) to change that bear behavior trend. ( See chart below - Ellipse )
WisdomTree Emerging Currency Strategy Fund