Technical view on why AAPL could be due for a retracement on support, while investors could take profit off their extended long positions
AAPL chart on a daily timescale can give important technical hints about the possible bear scenario for the stock. A large wedge pattern has seen three times the stock price drifting on the Bollinger band upper limit before generating quite a consistent sell momentum with investors taking profit on the stock price. The AAPL trendline has lately engaged the upper bound of the Bollinger band to then sell-off, while also generating another signal in engaging the Tenkan line, thereof a Dragonfly Doji shaped the Friday stock price action, where the support area can be clearly hinted on the Bollinger band median line and the IKH Kijun line, while traders had no doubt in engaging the Senkou A/B cloud span. The Bollinger band has been applied with a 3 standard deviation multiplier, to broaden the drifting range of Apple. If a Monday bid were to materialize, wedge trendline could help in finding short entry prices, or in a range $125<$126 AAPL. However, the AAPL bear scenario would see the stock price bouncing lower on $115<$116 support levels with the Senkou A/B span for a -5,5% retracement, that would provide a support rebound area, from where the stock price, however, could bounce lower to test the AAPL $110>$105 range for a -12% retracement. From the RSI oscillator becomes possible to see weaker momentum, given the overall stock market overbought conditions, with a possible drifting lower path.
On the exogenous factors to consider: rumours of a $900 Billion Fiscal relief package for Americans to get over Christmas and New Year, to be seen, while vaccination batches are on the move across America. On the other side of the Atlantic, Germany announced with Teutonic certainty full-scale lockdown commencing Wednesday, for one month. On top of that, UK/EU ongoing negotiations that could add up volatility in stock markets, on a forex standpoint and for stocks as well, if investors would take some exposure off their equities portfolios, to then reallocate with much clarity in 2021.
AAPL option straddle has seen increasing bid on all PUT side options, with investors buying protection at $86.25 strike prices, largest open interest has been on PUTs with $105 strike price, $107.5, $110, $112.50, $115, $121<$120, while there has been upside put on $125 and $130, the largest open interest contracts in the AAPL straddle options for Dec 18th.