For long suffering Apple (AAPL) shareholders it may not feel like it but the rally off the $385 was the "easy" part of the trade. At this point, shares are running headlong into a series of overhead resistance levels that could test the resolve of those who just got on board with the recovery.
That's the read the eponymous founder of Louise Yamada Technical Research Advisors. In the attached video, Yamada reminds viewers of the trading rule of thumb that "the greater the damage, the longer the need for repair."
Apple has withstood an enormous amount of damage from a chart perspective and the lows were put in over the last couple weeks. It's not inconceivable that shares could move back to the old highs or at least somewhere over $600. The company's massive debt deal and share buyback arguably change the fundamentals enough to obviate the charts.
Be as it may, Yamada suggests shareholders keep an eye on the following levels:
*$485: The 2009 uptrend for Apple. Shares gapped below this level earlier this year. Not a good sign.
*$500 - $530: The first mark for what's called a Fibonacci retracement. Hitting $485 would mark a 38% retracement of Apple's losses. Devotees of Fibonacci trading, and there's more of them than you may think, could be looking to take some profits there. Other Fib levels of note are $545 (50%) and $580 (62%). (Yamada rounds the numbers off in the attached video)
*$650: Broken support from last year.
None of these are written in stone. Technicals are only one part of the trading picture. On a fundamental basis charts have almost no value. Then again Apple shareholders need to ask themselves what the fundamental catalyst was that took the shares down from $700 to $385 in an almost straight lin
In a stock a volatile as Apple shareholders can use all the help they can get. Keep the the above lines in the sand in mind as shares climb their way higher.