Don't Ignore This Chart!

Apple Shows Positive Divergence on 60 Minute Chart

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Apple (AAPL) is breaking down beneath its November low and on the surface appears to be a broken stock, but its intraday 60 minute chart is telling a much different story.  Given the slowing volume this afternoon and near test of Wednesday's pre-Fed low, AAPL's turn higher in its hourly MACD has me hopeful that it's close to a short-term bottom.  Perhaps it's already been reached.  In addition to the slowing selling momentum, AAPL's RSI is close to 30 and that oversold indication has proven to be a solid entry point in the past few months as highlighted by the black shaded circles below:


Relative to the S&P 500, AAPL has clearly been laggard, but the combination of oversold RSI, a positive divergence and the more favorable seasonal period from December 16 through December 31 could be enough to turn the tide here.

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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