Unless you’re following Apple, or glance at it from time to time, you might not believe me when I say Apple (AAPL) stock is about $15 away from an all-time high just above $200 per share.  Yes - it has recovered that much since the bear market lows of $89 per share.  Let’s take a quick look at the weekly and daily charts.

AAPL Daily Chart Sept 28" src="http://farm3.static.flickr.com/2635/3967054480_4ac1db7d63_o.jpg" alt="" width="596" height="510" />

Hard to believe - price has doubled since the March lows into the September highs, retracing 90% if the $202 high to the $80 low… just under 10% of further up action to go to make a new Apple high.

There’s some potential ‘price resistance’ to work off as seen at the $190 level from the 2008 price swing highs, so any break solidly above $191 would likely trigger a “Magnet Trade” up to $200 to test the all time highs.  Any solid break of $202 could - strangely enough - argue for even further upside potential in the stock.

A quick look at the momentum oscillator shows that there was a nice positive momentum divergence and “rounded reversal” into the January 2009 lows before the current price rally.

The momentum oscillator currently is not really forming negative swing divergences, given that price really hasn’t formed any ’swings’ on its journey to the recent highs.  Thus, we would call this entire move a “single swing” to the upside.

The moving average orientation is in the most bullish position possible on the weekly frame.

Let’s drop down now to the dailies for more insights.

AAPL Daily Sept 29" src="http://farm3.static.flickr.com/2532/3967054262_341d1e82b1_o.jpg" alt="" width="612" height="513" />

This is the picture of price strength - price rising in a smooth, 45 degree angle (the angle of ascent has been increasing, which tells us that the trend is in the late mature stages), and the 20 EMA being consistently/solidly above the 50 EMA… and both of which are above the 200 day SMA.

You’d expect to see some type of divergence in a continually rising market, but we don’t see that - the 3/10 Momentum Oscillator has made tiny new highs all along the way, which continues to hint that higher price highs are yet to come (it serves as a “Confirmation” of price highs and the solid uptrend).

As long as price continues to bounce off the rising 20 EMA at $180, we should expect higher prices.  A break of $180 would set-up a test of the $170 level for quick swing/scalpers.

Otherwise, let’s see how buyers deal with the $190 prior price resistance level and - if broken - how quickly it will take price to test the $200 area.

Corey Rosenbloom, CMT
Afraid to Trade.com

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