Apple Inc. (AAPL) is obviously best known for its iconic iPhone, but holiday demand for the iPhone X appears to be in doubt this morning. The stock traded below $170 this morning, which would result in a downgrade of Apple's weekly chart if this weakness is sustained into year end on Friday.
The stock closed last Friday at $175.01, up 51.1% year to date and in bull market territory at 52.5% above its 52-week low of $114.76 set on Jan. 3. Only two Dow stocks have outperformed Apple: The Boeing Company (BA) has a gain of 89.6% year to date, and Caterpillar Inc. (CAT) has a gain of 67.9% year to date. (See also: Apple Downgraded to 'Neutral' at Instinet.)
Here's how the numbers worked in 2017
Apple stock closed 2016 at $115.82, and my annual risky level, or price target, was $151.69. The stock reached this target on May 8. Whenever a level is exceeded during its time horizon, it becomes a pivot (or magnet), and $151.69 was crossed several times until the stock stayed above that level on Sept. 26.
At the end of June, a new semiannual risky level was calculated at $173.25 as the price target for the second half of 2017. This target was first tested on Nov. 3 as a level at which to reduce holdings in the stock. This level was last tested as a pivot (or magnet) on Dec. 20, after the stock set its all-time intraday high of $177.20 on Dec. 18.
The daily chart for Apple
The daily chart for Apple shows that the stock has been above a "golden cross" since Sept. 6, 2016, when it closed at $107.70. A "golden cross" occurs when the 50-day simple moving average rises above the 200-day simple moving average and indicates that higher prices lie ahead. The horizontal lines show the annual pivot of $151.69 and the semiannual pivot of $173.25. Apple will likely open below $173.25 on Monday. (For more, see: What Makes Apple So Valuable?)
The weekly chart for Apple
The weekly chart for Apple is positive but overbought, with the stock above its five-week modified moving average of $170.31. The stock is well above its 200-week simple moving average at $118.11 and has been above this "reversion to the mean" since the week of July 1, 2016, when the average was $93.31. The 12 x 3 x 3 weekly slow stochastic reading ended last week at 83.80, up from 82.80 on Dec. 15 and above the overbought threshold of 80.00. A close on Friday below $170.31 would result in a downgrade to neutral or to negative.
Given these charts and analysis, it appears that a quarterly value level will remain at $141.84 as the level at which to buy on weakness in the first quarter, and it appears that semiannual and annual risky levels will come in around $183.60 and $191.81, respectively, as levels at which to reduce holdings on strength. (For additional reading, check out: Is Apple Planning to Use Blockchain?)