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Equity rally leaves Apple on the shelf

Equities 5 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

Summary:  Equities are bouncing off their December lows, but Apple shares are struggling to keep pace.


The equities bounce we have seen across the board since the lows of December 26 is not being led by Apple, which has lost 40% since its peak in October 2018.

The stock is struggling to recover, and the biggest short-term test for AAPL is whether it can fully close the gap from last week. During a massive move over several days, we often see three gaps: a breakaway gap, a continuation gap and an exhaustion gap. 

The gap seen last week seems to be an exhaustion gap which usually is the final step before a (larger) correction. An exhaustion gap will usually be closed within five trading days, but despite AAPL having closed the gap the correction is still struggling to get momentum. 

A close above 154.90 could provide the necessary momentum, but it remains to be seen if Apple can actually close above that level. The trend is down, but a look at the Relative Strength Index shows divergence, indicating a correction is due.

Volume also peaked at the current bottom, supporting price exhaustion. 

A rejection at 154.90 could lead to a retest of lows while a close above 156.40 would confirm a new uptrend... however long that might last. 
AAPL daily
Source: Saxo Bank
AAPL found support at the 200-week simple moving average at around 142.
AAPL weekly
Source: Saxo Bank

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