Apple (AAPL) Surges 7.65% in Two Days as Technical Indicators Signal Bullish Momentum

Apple (AAPL) is currently experiencing a strong upward trend, with a 4.31% gain in the most recent session and a 7.65% increase over the past two trading days. This momentum suggests potential bullish continuation, but must be evaluated alongside broader technical indicators to assess sustainability and risk.

Candlestick Theory

The recent price action forms a bullish pattern characterized by long upper shadows and narrow lower shadows, indicating strong buying pressure. Key support levels are identified at $237.88 (September 18 close) and $234.35 (September 9 close), while resistance appears at $245.50 (September 19 close) and $246.08 (September 22 high). A potential bearish reversal signal emerges on September 16, where a doji formed near $238.15, suggesting indecision. However, the recent two-day rally above $245.50 and $256.08 (September 22 close) reinforces a bullish bias.

Moving Average Theory

The 50-day moving average (calculated from the most recent 50 days) currently resides at $235.60, while the 200-day MA sits at $228.10. The price is trading above both, confirming an uptrend. The 50-day MA crossing above the 200-day MA (a "Golden Cross") occurred in early September, aligning with the recent rally. Short-term momentum is further supported by the 100-day MA at $232.40, which the price has not pierced since late August. This confluence suggests a continuation of the bullish trend in the near term.

MACD & KDJ Indicators

The MACD line has crossed above the signal line in late September, forming a Golden Cross and signaling potential trend acceleration. The KDJ oscillator shows the stochastic %K line rising above %D, indicating short-term bullish momentum. However, the RSI (discussed separately) is nearing overbought territory, which may precede a pullback. Divergences between the MACD and KDJ are minimal, suggesting alignment in momentum.

Bollinger Bands

Volatility has expanded recently, with the upper band reaching $257.00 and the lower band tightening near $230.00. The price is currently trading near the upper band, a classic sign of overbought conditions. A contraction in the bands (seen in mid-August) historically preceded a breakout, and the current expansion suggests continuation of the trend. However, a break below the middle band ($243.00) would signal increased bearish risk.

Volume-Price Relationship

Trading volume has surged during the recent rally, peaking at 105.5 million shares on September 19, validating the price strength. However, volume declined slightly on September 22 despite the 4.31% gain, which may indicate waning momentum. A sustained increase in volume during further gains would strengthen the bullish case, while a divergence could signal a reversal.

Relative Strength Index (RSI)

The 14-day RSI is currently at 68, approaching overbought territory (70). Historical data shows the RSI peaked at 72 in late April before a pullback, suggesting a potential correction. However, the recent rally is occurring within a broader uptrend, and the RSI’s overbought condition may persist without immediate reversal if volume remains strong.

Fibonacci Retracement

Key Fibonacci levels are drawn between the May 8 low ($197.49) and the May 12 high ($210.79). The 38.2% retracement level at $203.00 and the 61.8% level at $199.50 are critical for identifying potential support. The price is currently above these levels, but a pullback to $203.00 would test their validity.

Backtest Hypothesis

The backtest strategy of buying AAPL at MACD Golden Cross and holding for 14 days yielded a 43.98% return, slightly underperforming the benchmark by 0.37%. The strategy’s Sharpe Ratio of 0.50 indicates moderate risk-adjusted returns, with a maximum drawdown of 0.00% and volatility of 21.40%. The CAGR of 10.60% reflects moderate growth, aligning with the current bullish trend. However, the lack of drawdown suggests the strategy may not account for extreme volatility scenarios. Integrating Fibonacci retracement and RSI thresholds (e.g., exiting at 70 RSI) could enhance risk management.