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The central theses

  • Apple shares are at the top of watch lists after rising more than 7 percent on Tuesday to hit a new record closing price, the first since December.
  • This gain increased the iPhone maker’s market capitalization by around $215 billion, putting the company on the verge of regaining the title of the world’s most valuable company.
  • The stock’s breakout from a nine-month trading range came amid the highest trading volume in over a year, suggesting buying confidence among larger market participants.
  • A moderate move based on technical analysis predicts a price target for Apple shares of $228, while the upper trend line of the trading range at $197 could provide support in case of corrections.

Apple (AAPL) stock is at the top of watch lists after rising more than 7% on Tuesday to hit a new record close, the first since Dec. 14. The surge followed Monday’s unveiling of “Apple Intelligence,” a personalized version of artificial intelligence (AI) designed specifically for Apple devices, as well as a partnership with ChatGPT maker OpenAI.

The daily percentage gain, the iPhone maker’s largest since November 2022, increased the company’s market capitalization by around $215 billion and put it on the brink of reclaiming the title of the world’s most valuable company, a title currently held by traditional computer giant Microsoft (MSFT).

Below, we take a closer look at Apple’s chart and turn to technical analysis to identify key levels worth watching.

Breakout from the trading range

Apple shares have been trading within a set trading range since August of last year, with the price marking the upper and lower trendlines of the pattern several times over the past nine months. Since buying interest emerged at the lower end of the range in late April, the stock has continued to trend higher, hitting a new high of $207.15 on Tuesday, up 7.3%.

Importantly, the breakout occurred amid the highest trading volume in over a year, suggesting buyer conviction by larger market participants, while the 50-day moving average (MA) is also close to crossing above the 200-day MA and forming a golden cross buy signal, a chart pattern that technical analysts interpret as marking the start of a new uptrend.

Important levels in the Apple chart

Looking ahead, investors can predict a price target based on a measured move by calculating the distance of the trading range in dollars and adding the amount to the upper trendline of the pattern. For example, adding $31 to $197 gives a price target of $228. This level could become a potential resistance area where sellers could be comfortable taking profits.

When looking for retracement opportunities, investors should keep an eye on the upper trendline of the trading range at $197, as this area has most likely turned from a resistance area to a support area. One should also keep in mind that a failure to hold this important level could indicate a potential bull trap, a chart pattern that warns of a downward reversal.

The commentary, opinions and analysis expressed on Investopedia are for informational purposes only. Read our warranty and liability disclaimer for more information.

At the time of writing, the author does not own any of the securities mentioned above.

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