• Trade Negotiations continue February 17-23 in DC. Apple is waiting for some resolution to the US/China trade negotiations and the potential of increased tariffs March 1.
• Apple has announced a March 27 event expected to be the release of an upcoming streaming service.
• Apple is trading within an extremely tight range of 1%. Technical indicators reflect an imminent move. 
• Will no news, or not as bad as feared news be enough to break the stock out of its trading range.

Money Flow Index (80 is Overbought, 20 is Oversold) – has been in an established uptrend and has been hovering near an ‘Overbought’ condition. This is a divergence from the stock price action which has stopped increasing.

MACD Momentum – has flattened. A rise would be a ‘Buy’ signal. The Black Line crossing below the Red Line would be a Sell signal.

On Balance Volume (OBV shows accumulation/distribution) – is extremely flat reflecting that shares are being bought and sold in equally balanced volumes. OBV is not at a high level reflecting limited downside supply in the event of a selloff.

Volume – is perfectly symmetrical and balanced. The volume levels are near 25M which is not reflective of High Frequency Trading or Accumulation for a short selling setup.

Price is trading within a 1% range, for a $170 stock that is rare. If this continues, it will lead to a ‘Volatility Squeeze’ and a significant price move, up or down.

What does that mean at MONEYWISEHQ

• Volume: mid to low
• MFI: Uptrend near Overbought
• MACD: Low and flat
• OBV: was n a tight range
• Price: in a tight range

This does not look like the formula for a short selling setup and a price pullback.

A short selling setup would see shares being accumulated on rising volume and a rising stock price.

There are a number of positive catalysts

• The March 27 ‘Event’ expected to announce a new Streaming service is a significant catalyst.
• Trade negotiation resolution is going to be a significant catalyst. The concern of investors being that if the US increases tariffs, there will be a ‘soft Boycott’ of Apple products in retaliation. Apple’s sales have already dropped approximately 20%.
• The stock market looks ahead 6 months, which would roughly correspond with the rollout of an iPhone11 and the back to school season.

Throughout earnings season, stocks have made significant recoveries based on results being better than feared. It might just be that as long as the US and China keep talking, and the outcome is not as bad as feared, the potential upside to $185 and then $200 outweighs the downside risk to $160.

From such a tight range the move will be fast and big, up or down.

Strategy:

1. wait for an upside breakout before making purchases, or
2. Accumulate shares near $170, maintain a disciplined STOP LOSS near $168 with the goal of re-entering near $160 or a subsequent rise above $170