According to Fidelity.com, Apple, Inc. (AAPL) represents 12.95% and 6.51% of QQQ and SPY, respectively. QQQ and SPY are exchange traded funds that track the NASDAQ 100 and S&P 500 indices, respectively. That’s a very large weight, so it makes sense that AAPL’s influence will play a large role in overall stock market performance. This is not good news considering AAPL fell below a key price support level of 129.50 from the June low yesterday:
AAPL had established critical price support at 129.50 on Jun 16th. The volume that accompanied this collapse was high considering it was the typically weak volume period between Christmas and New Year’s. You can see at the bottom that AAPL has fallen completely out of favor and has underperformed the NASDAQ 100 poorly since early November. If the NASDAQ is to continue to rise from here, it will need help from the AAPL. We must respect this breakdown until AAPL can clear certain upward hurdles. For me, step #1 is to close above 129.50 again. You can see that AAPL has rallied more than 3% today and is currently just above 129.50. But where will it close today? Step #2 is to break above the overhead price resistance at 134.50 and the 20-day price exponential moving average (EMA), currently at 136.36 and falling fast. Time will tell if there is enough buying interest at this level to prompt these moves to the upside. For now, however, we must assume that the collapse of AAPL does not bode well for the health of the overall market.
While a stock like AAPL certainly has a lot of impact, it does exist lots other signals to watch as 2022 draws to a close and you open the book on 2023. This will be the theme of our fourth annual MarketVision event:
“MarketVision 2023 – The Road Ahead: Navigating an Uncertain Market”
This is a FREE virtual event that everyone interested in US stocks should attend. For more information and to register and secure your spot, CLICK HERE. We will reach capacity so please register TODAY!
Happy trading!
Tom
Tom Bowley is the Chief Market Strategist of EarningsBeats.com, a company that provides a research and education platform for both investment professionals and individual investors. Tom writes a comprehensive Daily Market Report (DMR) that provides guidance to EB.com members every day the exchange is open. Tom has brought technical expertise here at StockCharts.com since 2006 and also has a fundamental public accounting background which brings him unique skills to approach the US stock market.
