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Thursday, March 18, 2010

Apple & Google: Stock Chart Review

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A Tale of Two Tech Stocks
Apple has recently been making all-time highs while Google rallied off 2010 lows and then pulled back.


Apple



Noteworthy Closing Prices
Current 224.65
2010 YTD High 226.60 (3-12-10)
YE 12-31-09 210.73
10 Month EMA 188.27

Overview AAPL is up +9.79% for the month, up +6.61% for the year, and up +170.30% since the March 9, 2009 market bottom. AAPL peaked on Friday, March 12 at a 2010 YTD closing high plus an all-time closing high, generated by the iPad hype. An intermediate-term buy/long/bull signal was generated on Friday, March 12. Previously, an intermediate-term buy/long/bull signal occurred in mid February 2009 and the race was on - until a sell/short signal just before Christmas 2009. It was a amazing bull run! Another breakout, and buy/long signal, occurred a couple of weeks later, which lasted until February 17. Now yet another bull signal has occurred.

Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, generated a buy/long/bull signal on Friday, March 12, 2009. Therefore, AAPL is now in an intermediate-term bull market. That is, the 25d sma is higher than the 50d sma.

Resistance and Support The current closing price, the second highest yellow horizontal line is now below the March 12 YTD high, which is recent resistance.  AAPL is in a sideways trading range, consolidation, and on support from last week.

Moving Averages The 25d sma bottomed on February 26, began ascending strongly, and now has regained both the 100d and 50d sma's.. The 25d, 50d, 100d, and 200d sma's are ascending. Overall, the bullish signals are encouraging.

Uptrend Line The uptrend line, a rate of price ascent, is from the January 20, 2009 closing low of 78.20 up through the February 4, 2010 closing low of 192.05. The February 4 closing low has been the bottom for the 2010 pullback to date. AAPL battled this uptrend line for days before breaking out above February 25. Whether AAPL can continue above this trendline, this rate of price ascent, will ultimately determine price strength.

Downtrend Line There is no downtrend line, a rate of price descent, because AAPL is at an all-time high.

Relative Strength Index (RSI)
RSI 10 day = 84.67 is very overbought; has dropped from 99+ due to recent consolidation.
RSI 25 day = 79.87 is very overbought; has dropped from lower 80s due to recent consolidation
Expected pullback and consolidation is occurring, maybe even more soon, before eventually another surge upwards in 2010.

MACD (12,26,9) The MACD is bullish and has been since March 1.

Long-Term Trend The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. AAPL is well above this signal at the current close, the second highest yellow horizontal line.

Conclusion AAPL has rallied Big Time above the February 4, 2010 YTD closing low of 192.05, which has been lowest closing during the 2010 pullback. The current price is just below the 2010 YTD and all-time closing high. The RSI 25 day and 10 day indicate AAPL is very overbought, but the recent pullback and consolidation is decreasing the RSI some. Additiona consolidation and perhaps more pullback is possible, before another surge upwards in 2010. I stated previously that I thought the shorts, the bears, will jump on AAPL at some point due to the inevitability of a pullback. The intermediate-term trend became bullish on Friday, March 12. The long-term trend remains bullish.


Google



Noteworthy Closing Prices
Current 566.40
2010 YTD High 626.75 (1-4-10)
YE 12-31-09 619.98
10 Month EMA 519.85

Overview GOOG is up +7.52% for the month, down -8.64% for the year, and up +94.71% since the March 9, 2009 market bottom. Googzilla has pulled back from a recent closing high of 581.14 on Thursday, March 11.  The censorship conflict with China, and high probability of leaving the huge Chinese market, has damaged the stock price.  An intermediate-term buy/long signal was generated on April 13, 2009 and the Bull Run was on - until a sell/short signal on February 1, 2010, which is still in effect.

Intermediate-Term Trend The intermediate-term signal, the comparison of the 25 day and 50 day simple moving averages, still indicates an ongoing bear market since February 1 for GOOG. That is, the 25d sma is less than the 50d sma. This reveals the depth of the 2010 pullback. This pullback created price damage that has not been repaired through sustained higher prices.

Resistance and Support GOOG remains below the January 4, 2010 closing high, the highest yellow horizontal line and the 12-31-09 YE close, the second highest yellow horizontal line, both now recent resistance.  The current close, the thrid highest yellow horizontal line, is above the October 2009 highs, which is now recent support. GOOG is below the stair stepping November 2009 highs, which are resistance.  The recent high, before the small pullback, of 581.14 on March 11 is also resistance.  There is a lot of resistance above that must be overcome, before there can be any thought of regaining the 600.00+ price area and 2010 highs.

Moving Averages The 25d sma bottomed on March 1 and began ascending.  The 50d, continues descending. The 100d sma has leveled off and 200d sma continues ascending. Most bothersome has been the 25d sma breaking down through the 50d and 100d sma's plus the 50d sma breaking down through the 100d sma on March 4.. GOOG has now regained the 25d & 50d sma's, but has been battling the 100d sma for 8 of the last 10 trading days.

Uptrend Line The uptrend line, a rate of price ascent, is from the November 24, 2008 closing low of 257.44 up through the February 25, 2010 closing low of 526.43. The February 25 closing low has been the bottom for the 2010 pullback to date. GOOG stayed above this uptrend line since the next day, February 26.  Whether GOOG can continue above this uptrend line, this rate of price ascent, will determine whether a bull market signal is generated sooner.

Downtrend Line The yellow downtrend line, a rate of price descent, is from appoximately the November 6, 2007 all-time closing high of 741.79 down through the January 4, 2010 high of 626.75, the peak YTD closing high so far. GOOG has not reached this trend line.

Relative Strength Index (RSI)
RSI 10 day = 60.59 is reasonable; has dropped from lower 90s due to pullback & consolidation
RSI 25 day = 62.65 is reasonable; has dropped from lower 70s due to pullback & consolidation
RSI is not the problem with GOOG, probable loss of Chinese market is.

MACD (12,26,9) The MACD is bullish and has been since March 9.

Long-Term Trend The lowest horizontal yellow line is the 10 month exponential moving average from the monthly chart, which I have overlayed on this daily chart. That is the line in the sand, so to speak, for the long term signal of a bear market. GOOG is above this signal at the current close, the third highest yellow horizontal line.

Conclusion GOOG has rallied from the lows of February 25, peaked on March 11, and has pulled back some.  The current price is still below the December 2009 closing highs, 12-31-09 YE close, and the January 2010 YTD closing highs. There remains substantial recent resistance above. The RSI 10 day and 25 day are reasonable.  GOOG's problem is the censorship dispute with China and pulling out of the world's largest national Internet market.  Holding the current price levels and higher prices will eventually sustain a signal that an intermediate-term bull market has returned through ongoing price strength. The intermediate-term trend remains bearish. The long-term trend remains bullish.


Matrix Markets & Friends


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3 comments:

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