Technical Analysis of Apple (AAPL): Price Target & Key Levels ~ market folly

Thursday, April 22, 2010

Technical Analysis of Apple (AAPL): Price Target & Key Levels

Given that Apple (AAPL) just reported blowout earnings, Adam over at MarketClub wanted to take a look at the stock and sent out a technical analysis video on AAPL. In it, he pulls up the monthly candlestick chart and identifies $80 and $200 as key levels. From 2008 until early 2010, Apple traded in this range as it sold off hard throughout the crisis but then rebounded stronger. He says this area has created an 'energy field' as the stock consolidated (but that's quite a wide consolidation if you ask us).

The reason he outlines those two levels is to establish a price target. Subtracting the $80 level from the more recent $200 level, you get a 120 point move. Tacking that on top of the $200 level, he feels that a logical price target for Apple is $320 (200 + the 120 point consolidation). On a fundamental basis, this price target could be reasonable (after all, the company is firing on all cylinders.) However, we're not quite sure the technicals set up for such a move as you have to realize Apple has essentially run straight up from $80 to $258 with only one major pause. You can view Adam's video on Apple here.

We think the most notable bit of information to takeaway regarding AAPL's technicals is the $215-220 area. This level was previously an area of resistance and Apple has since blasted through it. Look for that level to serve as support going forward. In an ideal situation, this would be a great place to enter AAPL shares long if you ever see a pullback. Adam doesn't think shares will trade below that level and we'd concur. There's no denying Apple is a monster of a company right now. Not to mention, tons of hedge funds we track hold AAPL as one of their top positions. And you can bet they're not long for the technicals; they're in it for the fundamentals. Click below to watch the technical analysis video on Apple:

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