Editor’s Note: Micah Lamar is our Apple (AAPL) Stock expert. Enjoy his latest stock analysis along with his perspective on Invesco QQQ Trust (QQQ).
Apple’s stock is in an interesting place. It’s come all the way from the bottom of its long-term channel… bouncing from about $124 all the way to $157 where it formed what we call a “double top”.
We still have a longer degree channel that’s moving to the downside.. with lower highs and lower lows. Which means we may have reached a make or break moment for AAPL.
And when I come across these make or break moments, I turn to one of my favorite indicators, the MACD. It’s got a great batting average and risk reward, it’s incredibly profitable… and it just does a great job showing the overall momentum of a stock.
Looking at the MACD, AAPL crossed the Bulls back on Jan. 9 and it’s now getting close to crossing over to the Bears. APPL’s bullish cycles typically last about a month, so we’re about a week overdue for the stock to turn bearish.
From a stats perspective, when the MACD goes bearish, it’s not a good idea to be long in calls or anything that’s short term in nature.
If you’ve been long for about a month, I think it’s not a bad time to at least consider taking some money off the table. It’s been a good run.
Sure, there’s a chance AAPL could break out to the upside. But looking at the stock short term, it seems clear to me that we’re basically just compressing sideways.
Turning to QQQ…
We’ve gone through the first three phases of a rounding bottom.
Phase one involved lower highs and lower lows. Phase 2 is a sideways trend with level highs and level lows.
Phase 3 is when the stock or index moves back into an uptrend with higher highs… and lower lows. We’re not quite there yet.
The MACD is now bearish on QQQ, so I wouldn’t be surprised to see a little more compression…or even a small pullback.
But I believe we can expect another rally… potentially into the summer. If I’m right – and this could take a year or more to play out – we could see QQQ back up around $400.
Best,
Micah
