From Melanie Schaffer’s “Apple Pulls Back From All-Time High, But May Be Set To Climb Heading Into Earnings, Fed Meeting” posted Tuesday:
After dropping to the $155 level on Monday, Apple bounced up over 4% to close the trading day at $162.30. The wide trading range makes the possibility of sideways trading between Monday’s range the most likely scenario for Tuesday.
Due to the large drop in Apple from its Jan. 4 all-time high of $182.94, the stock is trading in a confirmed downtrend on the daily chart. In order to reverse into an uptrend on the larger timeframes, Apple will need to confirm an uptrend on the four-hour chart. Currently, the largest timeframe that has demonstrated a reversal to the upside is on the hourly chart.
A larger bounce will eventually come because Apple’s relative strength index (RSI) is measuring in at about 31%. When a stock’s RSI reaches the 30% level, it becomes oversold, which can be a buy signal for technical traders. The last time Apple’s RSI measured in near 30% was on March 8, 2021 and the stock rallied almost 15% over the month that followed.
Apple is trading below the eight-day and 21-day exponential moving averages (EMAs), with the eight-day EMA trending below the 21-day, both of which are bearish indicators. The stock is trading above the 200-day simple moving average, however, which indicates long-term sentiment is bullish.
My take: As I write this Apple is trading in the high $150s and its RSI is above 34.