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Asset Watch

Has Apple gone bad?

Thursday, April 19, 2023

With earnings season in full swing and large U.S. banks like JPMorgan and Bank of America outperforming expectations, fears of a deposit crisis have subsided. However, with only a couple weeks left until S&P 500 seasonality turns bearish in May, has Apple’s risk reward gone from attractive to unattractive?
After a superb rally off the January 2023 low, the iPhone maker confronts rising interest rates, which often weigh on technology stocks. And while the NASDAQ 100 has largely shrugged off the hawkish shift, there is typically a lagged response to rising Treasury yields.
Apple’s declining resistance line drawn from the January 2022 high has ended prior upswings, and it must clear the technical hurdle for the bull run to continue.
Apple Stock Chart Trading View

The red and black lines at the bottom of the chart represent the MACD and signal lines. If you analyse the vertical grey lines, you can see that when the MACD line drops below the signal line, ominous outcomes often follow.

The recent rally, trendline resistance, and the MACD reading rival the peaks from March/April and August 2022. Unless Apple can clear the upper trendline and the MACD rises above the signal line, caution is warranted in the weeks ahead.

So, will Apple succumb to the bearish backdrop, or is a breakout on the horizon?


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