APPLE Technicals Behavior
August 23 ( From TradingView )
August 23: Big Picture: From Emerging Markets Concerns to Emerging Turmoil
On August 16, I mentioned in my Weekly Research ( Big Picture: Emerging Concerns )
that Apple Shares
were under some Emerrging Markets Concerns and the financial riks associated to it. We went last week
from theEmerging Markets Concerns to Emerging Turmoil.
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 on Apple shares.
My Proxy for me is the CEW ETF ( WisdomTree Emerging Currency Strategy Fund ) which is down 17.0% from a year ago as shown by the chart below. Also keeping an eye on the EEM ETF ( iShares MSCI Emerging Markets ETF - Blue Line Chart Below ).
That will keep pressure on Apple in terms of growth ( price increases vs market share vs competition ).
I do not want to look too bearish here, but CEW is at crossroads: This will be the make or break week. Either a consolidation from a dead cat bounce or a total meltdown as we are at the Weekly Major Support Trendline from a falling wedge that started back in May 2010. ( Bottom Red Trendline - Chart Below )
RV closed on August 21 at 1.77, well below it s 200 DMA at 1.90 and pure Volatility closed at 49.61% last Friday, level well above its 200 DMA at 28.2%.
This is the highest Volatility close since October 2011...
What I am telling you is that Volatilty and Relative Volatility is still on the very 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...
SO Options spread ( call or put spread ) instead of pure options play is a must here...
It is important to know for long term options behavior....
The Weekly August 28 106 Straddle ( Long Call and Long Put ) closed last Friday at $5.99 and
I will follow that straddle this week...
So, for Monday Morning, we can expect a Dead Cat bounce to $108.20 to $109.35 but we need to break that downward channel for a Real Bullish Trend... CEW and EEM ETFs will be my lead into that turmoil...
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 $104.34 support and $113.94 as resistance.
( see Chart Below ).
On a Daily basis, we need a close above that Resistance Trendline of that Downward Channel at $113.94 ( 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 $121.59.
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 $113.94 for Monday August 24 as shown by the chart below ( Ellipse ).
But for me, the most interesting Technical Factor here is that we are within the Zone which I wrote about as potential Bear Target: the $103 to $106 zone. More precisely now, is it between $103.74 to $106.26 which we should expect some strong support ( rebound zone ) within a Bear Trade. ( Blue Trendlines - Chart Below ).
IF ever we break $103.74 ( daily close ), then another nasty bear wave towards $100.54 MAX $97.72 is expected...
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.
We also broke the support trendline on August 4 ( Blue Trendline on the Chart Below )
We are at crossroads on a Relative Basis ( AAPL vs SP500 ) as we closed last week near the Support Trendline that started in October 2014. Breaking That support will bring another underperformance wave for Apple Shares compare to the Mighty SP500 Index ( Red Trendline - Chart Below )
It is crucial that we stay above that Support Trendline 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 )
We also broke on the week of August 17 the Weekly Support Trendline then at $108.40.
For the weekly, we are now within a downtrend channel that started on the week of July 27 with $104.25 as support and $118.62 as resistance. See chart below.
We need to get above on a weekly basis the $114.85 level ( which is the previous weeekly break out back on the January 26 2015 week ) to change that Macro Bear Behavior trend. ( See chart below - Red Trendline )
ETF ( WisdomTree Emerging Currency Strategy Fund )
EEM ETF ( iShares MSCI Emerging Markets )
Weekly Blue Line