AAPL Weekly (7/27/13)

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AAPL             has been taking a beating in the 7 months. The stock has been pushed down by the powerful down trending resistance line. Multiple attempts (red arrows) were made but none consistently broke the resistant line. In the past 4-5 weeks, we are seeing the build up of another attempt in breaking out this resistance.

What's different about this one? Couple of things.
(1) Fundamentally, AAPL             is perceived to be stronger, as new products are expected to be release in the next few months. Iphones have been selling well (better than Samsung despite of having older models), above the low expectations. These suggest that the AAPL             ecosystem and products are more attractive and more resistant to "market saturation" that many of the analysts were worried about.
(2) Technically, AAPL             is making a more consistent uptrend (going up 4 weeks in a roll). This is something we haven't seen for awhile. Overall, the bullish sentiment is more resilient this time (partially fueled by the recent earning report). In addition, the MACD histogram is trending up. There is convergence on stochastics (higher lows on both stock prices and stochastics on the most recent bottoms). These are bullish .

Where are we going next week?
This chart demonstrates intersection of the support and resistance lines. There will be a breakout one way or the other. I expect there to be a bullish breakout. Next week is the key here. Watch carefully. Once the resistance line is broken, the next resistance will be $460. The next significant resistance will be around $490-500. Stay tuned.

Disclaimer: I am long AAPL             .
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