Wednesday, July 11, 2012

Dow Jones Industrial Average pulls back to 5-week price channel support; Apple (AAPL) behaves bullishly

A steady selloff from morning highs brought the Dow Jones Industrial Average (DJIA generally; DJX below) to support from a 5-week price channel. Meanwhile Apple shares – being mentioned here due to a reader request – appear as bullish as ever.

As the closing bell rang, the S&P500 settled 0.8% lower. The NASDAQ shed 1.0%, and the DJIA was a relative outperformer with only a 0.7% decline.

The last hour of trading brought the Dow to support from a 5-week, upward sloping price channel. Price temporarily pierced through the support, arriving at the intraday low of 12607, but the hourly bar then rebounded to close at 12653, somewhat above the support line. The intraday low was also notable for being quite close to the 200-period simple moving average using hourly candles, currently at 12583.

DJX, 90 d 1h
Apple shares have trended very bullishly over the past 7 trading sessions after consolidating since approximately mid-April from their late-2011 / early-2012 advance. Thursday of last week saw price action break through the resistance of one upward-sloping price channel (marked in red below; resistance was at about $601), and price continued to appreciate until today encountering resistance from a steeper upward-sloping price channel (marked in yellow below; resistance was at around $620).

Even with today’s modest 0.9% decline, AAPL remains about $27 above its 200-period SMA based on hourly candles, a level of bullish sentiment that, before the past 5 days’ price action, was not encountered since April 13th.

AAPL, 70 d 1h

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