Take a bite of Apple profits and buy Rolls-Royce?

TL;DR

Apple's recent chart action, with multiple lower momentum peaks and an overshoot of resistance, suggests that the stock has topped and is heading for a major downturn.

Transcript

hello it's john burford with chart of the week for monday the 29th of november and i'm covering apple again which i covered most recently on the 20th of september where i made a case that taking profits uh in the the huge bull run um that has taken place um would be a prudent move and since then i have found no reason to change my view in fact it h... Read More

Key Insights

• 🔈 Apple's stock has shown lower momentum peaks, indicating weakening buying pressure and a potential trend reversal.
• 💹 The overshoot of resistance in Apple's chart suggests a buying climax and a likely downtrend ahead.
• 😫 The Omicron variant of COVID-19 has created volatile markets, but panic has not yet set in.
• 🍳 The FTSE's recent break below a major support level and an overshoot of resistance further support the possibility of a market downturn.
• 👋 Rolls-Royce stock presents a potential buying opportunity with a clear three-wave correction and a Fibonacci 50 retracement.

Questions & Answers

Q: What is the significance of the lower momentum peaks in Apple's chart?

The lower momentum peaks suggest that with each new high, the buying pressure in Apple's stock was weakening. This indicates a potential trend reversal and a likely downturn.

Q: What does the overshoot of resistance in Apple's chart indicate?

The overshoot of resistance suggests a buying climax, where the stock briefly surpasses a key resistance level and then quickly retreats. This is often a sign of a major trend reversal and could indicate a downtrend for Apple.

Q: How has the Omicron variant of COVID-19 affected the market?

The Omicron variant has created highly emotional and volatile markets with wide swings. However, panic does not seem to have set in yet, and market reactions are still unfolding as it is early to assess the potential damage.

Q: How does the FTSE chart support the possibility of a market downturn?

The FTSE has been in an eight-month congestion zone and recently broke below a key support level. This, combined with an overshoot of resistance, suggests a potential buying climax and a forthcoming downtrend.

Summary & Key Takeaways

• The weekly chart of Apple shows a strong upward trend over the past year and a half, but multiple lower momentum peaks indicate weakening buying pressure.

• The recent overshoot of resistance and quick retreat suggests a potential buying climax and a likely downtrend ahead.

• The Omicron variant of COVID-19 has created volatile markets, but panic does not seem to have set in yet.