Watch out for a potential short-term reversal in Apple

[MongiIG]

Watch out for a potential short-term reversal in Apple

Apple stock is at risk of a short-term reversal, even as the company becomes the first to reach a $3 trillion stock market valuation.

Source: Bloomberg

IG | Writer, | Publication date: Wednesday 05 January 2022 

Yesterday Apple became the first company to touch a $3 trillion market valuation before closing the day just short of the mark.

This event may be followed by some near-term consolidation, if charts are anything to go by.  Since yesterday’s new all-time high at $183.35 has been followed by a potential Dark Cloud Cover on the daily candlestick chart, and since it has also been accompanied by negative divergence on the daily 9-period RSI in an overbought area, the odds would favour some consolidation once the candlestick pattern has been confirmed.

This would be the case if a slip through yesterday’s low at $179.16 and ideally a daily chart close today below this level were to be witnessed. If so, at least a retracement back towards the November to January uptrend line at $175.60 is likely to ensue.

Further potential support comes in at the early December $170.28 high and also at the 20 December $167.05 low. Only a fall through the latter level would mean that a more significant top is being formed which would have bearish implications.

Whilst above $167.05 the underlying uptrend remains very much intact though, with the psychological $200.00 mark representing a potential upside target.

Source: ProRealTime