3 days Ago
Market heavyweight Apple (AAPL) has become range-bound within the context of its primary uptrend. On the weekly bar chart, AAPL has its first MACD 'sell' signal since January. This reflects a notable loss of intermediate-term momentum, suggesting AAPL has entered a corrective period that could prolong itself several weeks.
The weekly stochastics have also turned decisively lower since AAPL failed to clear resistance from its July high, near $233. This is a setback within the context of the cyclical uptrend framed by the weekly cloud model (shaded area on the chart). Initial support for AAPL is near $213 according to the daily cloud model (not shown).
Near-term volatility surrounding this week's FOMC announcement may generate a knee-jerk bounce, but our intermediate-term indicators ultimately support a breakdown. This would shift our focus to long-term secondary support near $198, which is the breakout point from June. This is a key level on the chart, bolstered by the 40-week moving average and the weekly cloud model later this year.
We would expect buyers to ultimately resurface closer to the cloud, respecting the secular uptrend. Headwind for months The monthly chart shows that long-term overbought conditions are in place for AAPL per the stochastic oscillator. This presents an additional headwind for AAPL over the next few months.
The monthly MACD points higher, supporting the cyclical uptrend, and the rising monthly cloud model reflects a secular uptrend, but the overbought downturn supports a counter-trend move. AAPL is the largest component of the S & P 500, comprising nearly 7% of its weighting. Therefore, a corrective phase in AAPL would be a drag on the major indices, which already face a weak seasonal period in September and October.
—Katie Stockton with Will Tamplin Access research from Fairlead Strategies for free here . DISCLOSURES: (None) All opinions expressed by the CNBC Pro contributors are solely their opinions and do not reflect the opinions of CNBC, NBC UNIVERSAL, their parent company or affiliates, and may have been previously disseminated by them on television, radio, internet or another medium. THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY .
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