Don't Ignore This Chart!

Can Apple (AAPL) Save Computer Hardware?

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The Dow Jones U.S. Computer Hardware Index ($DJUSCR) is testing significant price support created by the breakout in the fourth quarter of 2014 and the subsequent retracement back to that level just three months later.  Recent weakness in Apple (AAPL) shares, along with other computer hardware stocks, has this index looking vulnerable to a much bigger selloff if price support is lost.  Trendline support has been lost, MACD centerline support has been lost, relative trendline support vs. the S&P 500 has been lost and now price support is being tested.  What's perhaps most problematic is that AAPL has continued to perform well vs. its computer hardware peers despite deteriorating technical action on its own chart.  In the bottom indicator window, AAPL has lost its 20 week EMA support, a level it held for the past two years.  In addition, and not shown here, AAPL fell below its 20 DAY EMA on its daily chart and has been failing to clear overhead resistance at that moving average recently - bearish action indeed.  Finally, AAPL's worst performance seasonally occurs in September as it's risen just 42% of the time in September over the past 20 years with an average return during September of -1.8%, its worst monthly performance in terms of return.  Check out the chart:

Be careful in the very near-term.

Happy trading!

Tom

Tom Bowley
About the author: is the Chief Market Strategist at EarningsBeats.com, where he provides stock market education, guidance, and trading strategies using a unique combination of technical, fundamental, and historical analysis. Tom provides EarningsBeats.com members with four portfolios (Model, Aggressive, Income, and Value), all designed to beat the benchmark S&P 500, and a revolving Watch List of hundreds of companies reporting strong quarterly earnings (must beat both revenue and EPS estimates) and exhibiting technical strength as well. These companies comprise EarningsBeats' annotated Strong Earnings ChartList (SECL), from which Tom trades exclusively. Tom writes a Daily Market Report (DMR) for members to include an executive summary, market outlook, sector/industry watch, and trading ideas. Learn More
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