The Key Takeaways
- Apple’s shares could remain in the spotlight Tuesday, after they reached a record high yesterday. It was their 21st close to a year-end.
- The stock broke out from a five-month ascending triangle earlier this month, signaling a continuation of the iPhone maker's longer-term uptrend.
- According to this principle, the price target is $278. It calculates the height of an ascending triangle at its largest section, and then adds it to the trendline’s upper line.
- Investors should watch key support levels on Apple's chart around $237, $218, and $197.
Apple’s (AAPL), shares may remain in the spotlight Tuesday, after achieving a new record high yesterday. This is their 21st close at ATH.
Ben Reitzes of Melius Research told CNBC’s “Squawk on the Street” In a recent article, the iPhone manufacturer was quoted as saying that it is well-positioned to profit from the multi-year product cycle. They also said that OpenAI’s ChatGPT integration offers potential revenue through the pro-version upgrade.
Apple shares were mostly flat during the third quarter. Investors digested Apple Intelligence, the highly anticipated features of Apple’s new products. They also considered the potential impact this delay would have on the sales of Apple devices. The stock is now on an upward trend, with a rally of more than 12 percent from the low of early November and a trading price of 28% above the beginning of the year.
Here we will take a close look at Apple’s chart, and highlight key price levels for investors to be on the alert.
Ascending Triangle Signals Bullish Continuation
Apple shares broke through a 5-month ascending triangular pattern earlier this month. This signals a continuation in the longer-term upward trend of Apple.
In Monday’s trading, the stock price completed an engulfing bullish pattern and set a record high.
Although the relative strength (RSI) indicates a positive price trend, it also shows overbought levels that can lead to a near-term increase in profits.
We can use technical analysis to predict where the price of the stock may go next, if this current move continues. Also identify three important support levels which could draw buyers during retracements.
Chart-based Price Target to watch
Using the measuring principle – a technique which analyses charts to forecast future movement – investors can predict a bullish target price.
To apply the tool on Apple’s chart we add the value of the trendline’s uppermost line to the depth calculated by the ascending triangular pattern.
If we multiply $237 by $41, the price will rise to about $278. That’s 13% more than yesterday’s price.
The Key Support Levels Monitor
Investors should monitor the response of the stock price to a dip. They can do this by watching the level $237. Stocks may be bought in the area around the trendline at top of ascending triangle, as this may turn from an area that was previously a resistance level into a future support.
Bulls failing to defend the area may see shares drop to about $218. At this price, they could attract support around the June peak. The price is also close to the July, September and November troughs.
Finaly, an even deeper correction could result in a return to the support area of $197. Investors will likely be looking for long-term buy and hold opportunities around the multi-month trendline connecting a series of similar trading levels from July 2023 through August 2018.
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According to the article, as of its date of publication, the author did not hold any of these securities.
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