Apple Share Price Locked In A Tight Range: But For How Long?

Summary:

For the last two weeks, the Apple share price has been stuck in a tight sideways channel. The potential for a big move is increasing every day.

For the last two weeks, the Apple share price has been stuck in a tight sideways channel. The potential for a big move is increasing every day.

Last week I discussed Apple (AAPL) and how the price had reacted to the ongoing anti-trust hearing.

The Apple share price has, in fact, not reacted at all. The stock is currently trading at $125.28. This is pretty much the same level as this time last week.

Clearly, traders will be nervous about taking a position in either direction until legal proceedings are brought to a close. And that makes perfect sense.

This uncertainty has kept the price pinned between a series of important indicators. This suggests that when the price does eventually move, it is likely to do so in a big way.

Apple Share Price Outlook

The daily chart perfectly highlights Apple’s narrow trading range. Since the 11th of May, the price has been capped by the 50 and 100-Day Moving Averages at $127.82 and $128.80.

Additionally, the 200 DMA and an ascending trend line have so far stopped the price from dropping.

The trend has been in place since the September $103.07 low. The line has been a good source of support, and the price has bounced from several previous touches.

The 200 DMA is seen as an important indicator. A stock that trades above the indicator is considered to be in a long-term uptrend. The reverse is true if the price is below.

The Apple share price has been above the average since March 2020. Over the last two weeks, AAPl has traded on or below the average but managed to recover by the end of the day.

A break of the upside resistance would certainly be viewed as bullish. This should set the Apple share price up for further gains. In this instance, the initial upside target would be the 29th of April high at $137.07.

However, if the price falls below the support of the trend line and the 200 DMA, the size of the move could be even bigger.

I consider the support below the market more important than the resistance above.

Why?

Most investors in stocks hold long positions. Therefore, it makes sense that the downside has more potential than the upside on a breakout.

A logical downside target would be the previous all-time high at $100.00 from July 2020. When the price broke through this level, it led to a parabolic rally to $140.00.

Therefore, I consider this an important number.

For now, there is no trade to take. But a signal will be just around the corner. Apple is certainly a stock to add your watchlist for the next couple of weeks.