Be honest. How many of you thought that Apple (AAPL), Alphabet (GOOGL), and Tesla (TSLA) could struggle collectively, while the S&P 500 continued to set record high after record high? I'm not surprised at all, because secular bull market advances are stubborn and money rotates when former leaders stall. That's one of the hallmarks of a bull market. They're incredibly resilient.
Today, I want to focus on AAPL, because it's providing early signals that it will soon rejoin the bull market leadership. Here's the daily chart:
Here's what I see when I look at the AAPL chart:
- AAPL's leadership ended with the emergence of a negative divergence in late 2023
- AAPL gapped lower to begin 2024 and started a period of market maker manipulation where AAPL fell nearly 13 bucks. But AAPL, collectively during the past two months, fell 27 bucks at the opening bell and during the first 90 minutes of trading. In the final 5 hours of trading during January and February, AAPL actually gained nearly 15 bucks. There were plenty of afternoon buyers (market makers) accumulating shares while unaware retail traders were being encouraged to sell during the weak morning hours
- The AD line has moved steadily higher in 2024, underscoring this accumulation
- Price support near the 180 level is quite clear
- AAPL broke down intraday on Friday, but recovered in the afternoon, printing a doji, one form of a reversing candlestick
While I believe AAPL is poised to regain its leadership role sooner rather than later, which will help large cap stocks and our key indices, I've begun to rotate more and more towards small cap stocks. I'm so bullish on small caps right now that I've decided to feature 3 excellent small cap trading candidates this week in my FREE EB Digest newsletter. If you're interested in learning more about these stocks and their significant upside potential, CLICK HERE and sign up for our EB Digest with your name and email address - it's absolutely FREE!
Happy trading!
Tom Bowley, Chief Market Strategist, EarningsBeats.com
