Buying Apple stock when AAPL share price hit $700

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Fortunately I didn’t buy Apple stock for $700! AAPL share price has dropped 21.5% since the all-time high and you can invest in an Apple share for “just” $547 at the start of this week. Several technical indicators show negative signs regarding the strong uptrend of Apple shares, such as MACD divergence and a “morning star” candlestick pattern at the weekly graph, in addition to the bearish formation printed in the monthly graph. AAPL share price has pulled back to a key support level that will probably be used as an entry level for some stock traders. The question is whether Apple stock will breach the resistance level at $610 or $650 once again. If not, $700 would be nothing more than a sweet memory for Apple.

I would be very surprised if Apple share price breaches the support level at around $530 in the following weeks. A bounce is much more likely I guess. Due to the MACD divergence I am predicting that Apple’s uptrend is coming to a halt though. $700 will be key resistance from now on for any upward movement for Apple stock, which is expected to enter a consolidation phase in the next months. Consolidating between $530 and $700 or $650 doesn’t mean avoiding buying Apple stock, but rather being more cautious and less optimistic for new highs.

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Perhaps by consolidating, AAPL share price will build up enough strength to shoot over the resistance level of $700. If that happens, momentum and over-reaction by investors will guarantee much higher prices for Apple stock. On the other hand, should the support level at $530 fail, I won’t be buying Apple stock until it finds support somewhere between $350 and $400. And even then I won’t be that excited with my investment, given I don’t own any Apple product, like an iPad or an iPhone! Perhaps Apple fanboys have a different view of the Apple stock!

Disclaimer: I have no positions in any stocks mentioned and no plans to initiate any positions within the next 72 hours.

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