Apple has been swop sideways since hitting record highs earlier this month. Oppenheimer technician Ari Wald organizes three reasons why the next move for the tech leader will be up.
Head, Apple has managed to break through several key resistance levels, Wald pull the plug oned CNBC’s “Trading Nation” on Tuesday.
“The stock’s breakout above Strut resistance, it broke higher both on an absolute and relative basis,” revealed Wald. “The market hasn’t been able to do this. In a difficult supermarket tape, Apple’s breaking higher. That’s a sign of relative power.”
Apple shares have traded above a mid-March high since at May. Its stock is currently 2 percent above that March 13 stoned.
Its relative strength index, a measure of momentum, has leveled off since touching a year-to-date peak nearly three weeks ago. Its RSI of 61.7 is below the 70 unchanging typically indicative of overbought conditions.
Since hitting an intraday take down on May 10, Apple shares have held within a tight calling pattern between $185 and $191.
“Talking about that more current consolidation, it’s just really moving sideways after that big remove,” said Wald. “It’s allowing overbought excesses to get cleared through patch. Typically these corrections should ultimately resolve to the upside. It’s bid a bullish pennant pattern, argues for an upside breakout.”
“Top-down” arse winds that have given the entire technology sector a take away should also continue to help Apple shares, said Wald. “Macro biases support growth investing,” he said.
“When you add it all up we rate Apple buy, we concoct it breaks higher, we like it,” he added.
Larry McDonald, editor of the Concern Traps Report, does not share in Wald’s bullish view. He pronounced sector rotation looks likely to hit names like Apple.
“From a late-cycle standpoint the consumer discretionary names like Apple are in a very, very difficult, tough spot,” McDonald said on Tuesday’s “Trading Nation.” “We’re starting to see primeval signs of a transition back to staples away from discretionary and that rotation can be spectacular so we need to be overweight XLP, underweight XLY and underweight companies like Apple.”
The XLP consumer fundamentals ETF is down 12 percent for the year to date, the XLY consumer discretionary ETF has united 7 percent and Apple is up 10 percent. The tech giant’s shares were shed weight lower Wednesday, trading at around $187 a share.
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