Decision time: Bull vs. Bear
Since July, AAPL has been on a bullish trend. Fueled by a better than expected earning and hedge fund positions, AAPL broke multiple median term resistances. However, in the past 2 weeks, we found ourselves in the middle of a consolidation zone ($485-$510). After AAPL was rejected at $510-$515, it broke through the support at $500. Now we are at the lower area of the consolidation, supported by a strong floor at $485.
In order to break out the consolidation (either up or down), additional catalyst is necessary. Next week, there are two events to watch for, and will provide some ammunition (one way or the other)
#1: Sept 10 iPhone release event in the US. What does APPLE have in store for us? Any major surprises will do. iPhone 5S and 5C (+ iPods) are given. When will these new iPhones be available in the US? How about new iPads (Sept vs. Oct releases), iOS7 (when will it be ready?), iTune (music streaming?). Finger sensors on iPhone? What's going on with Apple TV / or iTV?
#2: Sept 11 iPhone event in China. Perhaps this is more important than the US announcement. Will China Mobile be carrying the new iPhones? When will they be available? What's the price point (i.e. profit margins)?
One way or the other, there are enough catalysts to send AAPL either up (bullish case) or down (bearish case). The #3 catalyst is usually the week after the iPhones are release. How many iPhones were sold in the first week?
Technically, some traders also point out the golden cross. I don't particularly find it relevant (by itself) as a catalyst. Remember the death cross, and how some analysts felt that it was going to signal the bottom (and it didn't)?
Another technically point that I want to demonstrate is the bullish support line (purple diagonal line). It will intersect $500 in the next couple of days. Basically, the stock will either get "pushed" back up into the upper consolidation zone (above $500, bullish case), or finds it self below the bullish support line (bearish case). The latter will mark the end of bullish trend, and lead to either protracted consolidation phase, or worse yet, start of bearish trend.
Next week is the key.
Let's keep our fingers crossed!
Since July, AAPL has been on a bullish trend. Fueled by a better than expected earning and hedge fund positions, AAPL broke multiple median term resistances. However, in the past 2 weeks, we found ourselves in the middle of a consolidation zone ($485-$510). After AAPL was rejected at $510-$515, it broke through the support at $500. Now we are at the lower area of the consolidation, supported by a strong floor at $485.
In order to break out the consolidation (either up or down), additional catalyst is necessary. Next week, there are two events to watch for, and will provide some ammunition (one way or the other)
#1: Sept 10 iPhone release event in the US. What does APPLE have in store for us? Any major surprises will do. iPhone 5S and 5C (+ iPods) are given. When will these new iPhones be available in the US? How about new iPads (Sept vs. Oct releases), iOS7 (when will it be ready?), iTune (music streaming?). Finger sensors on iPhone? What's going on with Apple TV / or iTV?
#2: Sept 11 iPhone event in China. Perhaps this is more important than the US announcement. Will China Mobile be carrying the new iPhones? When will they be available? What's the price point (i.e. profit margins)?
One way or the other, there are enough catalysts to send AAPL either up (bullish case) or down (bearish case). The #3 catalyst is usually the week after the iPhones are release. How many iPhones were sold in the first week?
Technically, some traders also point out the golden cross. I don't particularly find it relevant (by itself) as a catalyst. Remember the death cross, and how some analysts felt that it was going to signal the bottom (and it didn't)?
Another technically point that I want to demonstrate is the bullish support line (purple diagonal line). It will intersect $500 in the next couple of days. Basically, the stock will either get "pushed" back up into the upper consolidation zone (above $500, bullish case), or finds it self below the bullish support line (bearish case). The latter will mark the end of bullish trend, and lead to either protracted consolidation phase, or worse yet, start of bearish trend.
Next week is the key.
Let's keep our fingers crossed!