As this monthly chart of the Big AAPL shows, there have been three
well defined primary uptrends (bull markets) in the stock over the last
14 years. Each of those trend reversals were confirmed by three
criteria:
- A break below the primary uptrend line or a successful back test of the trendline following the breakdown.
- A bearish crossover on the MACD (as best viewed on the MACD histogram)
- A break (and close) below the 20 month exponential moving average.
As this chart illustrates, the first two criteria have been met and
currently, prices are sitting on the 20 ema but have yet to print a
monthly close below. Coincidentally (or really not), a break below the
20 month ema would coincide with the critical support level that I’ve
been highlighting on the daily time frame.
With just five trading
sessions left in the year, will Santa bring AAPL a gift and keep it
above that 20 ema by the close on Jan 31st or will he give AAPL a lump
of coal in its stocking, dragging the stock lower to close below that
level, thereby giving the stock it’s third and most likely final long-term sell
signal and confirmation of a new bear market in the world’s largest
publicly traded company?
