How Apple's chart signaled rebound
Before Apple posted its highest close ever yesterday, the stock saw losses of more than 1 percent in morning trading. But a closer look at its intraday chart reveals some signs that the shares were about to rebound.
Reports of the new iPad running warmer then its predecessor were a likely catalyst for at least part of the dip, as well as some natural profit-taking at the $600 level. But the price activity indicates that a bullish trend was emerging even as the stock traded in the red.
The simplest signal was AAPL holding the $595 level several times before buyers entered in force. The action was similar to Monday's trading, when a determined buyer took shares to the $600 level in very similar fashion.
Yesterday that $600 resistance gave way, resulting in a new intraday high of $606.90 before the stock closed at $605.96. As you can see on the chart below, the shares appear to be building a base at the $595-$600 area, clearly above AAPL's six-month uptrend.
(Chart courtesy of tradeMONSTER )
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