Wednesday, March 05, 2014

Apple and Google

Here are daily bar charts of a former market leader, Apple (AAPL) and a current market leader, Google (GOOG).

While the general market is trading well above its 2012 highs APPL is not even close to its 2012 top. Even worse, it is below its late 2013 top while the broad market averages are trading above their late 2013 tops. This relative weakness in AAPL suggests to me that even if AAPL makes it up to 600 it will still be lagging the market. And any down turn from current levels in AAPL would have very bearish implications. In particular, a move below its 200 day moving average which currently is at 489 and right at the late January 2014 low would mean that AAPL is headed well below the 380 level.

In contrast to AAPL, Google is very strong and leading the market upward. My current upside target is 1250, an even thousand dollars above its 2008 bear market low at 247. The 200 day moving average is currently at 985 and will probably provide support for any drop going forward. In fact the biggest drop in GOOG on the way up from its 2008 low at 247 was 196 so I doubt that the next big break will exceed $200 or so.

The bull market trend in the general market remains intact. All three of my trend indicators - the Dow, the S&P 500, and the NYSE advance decline line remain above their 50 day moving averages. The next significant reaction in the broader market will be signaled by a drop in two of these three indicators below their 50 day moving averages. I still think the S&P will move well above 1900 before such a sell signal materializes.

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