Apple (AAPL) Stock Forecast: AAPL still struggling but has strong support at $123

Apple shares continue to struggle for momentum as that strong earnings report really was met with a shrug of the shoulders. Not to mention the fact that Apple increased its dividend payment and increased its share buyback program. Neither was enough to rouse bulls to push further. Never a great sign when good news is met with indifference or downright negativity. 

Apple released earnings for Q1 on April 28. Earnings per share were reported at $1.40 versus the average analyst forecast of $0.99, a 40% beat. AAPL shares were trading at $131 at the time of earnings and popped up to $137 before gradually sliding back to $125. Now Apple shares find themselves in the mid $120s and struggling for momentum.

Apple stock forecast

We mentioned on Monday that the Friday rally saw Apple shares move just about up into the neutral zone. Apple stalled at the 9-day moving average (MA) resistance at $127.33, and the shares did not do a whole lot else on Monday. The moving average is now at $127.12 for the 9-day, and this is the first level to break that will set the scene for a move to test $131.45. From $131.45 to $135.51 is pretty strong resistance and a consolidation area, so AAPL may find it hard to accelerate through this region. Once $135.51 is taken, the move should accelerate toward a test of highs at $145.08. There is little consolidation or price discovery between $135 and $145, however.

Anyone can see clearly why Apple staged the recovery. The bear target, consolidation 1 area is a region of strong price support with large price discovery and volume. This area also neatly contained the 200-day moving average (MA) support. This means it was a strong support zone with a confluence of indicators combining.

AAPL shares are at a pivot now from the 9-day MA. Break higher and the levels above will be in play, but a failure will see a retracement toward $124 and $123.43, the 200-day MA. Failure would also likely see a more prolonged period testing the consolidation 1 area. This will enable traders to play the range ($119-124) and use stops in case of any breakouts. 

Both the Moving Average Convergence Divergence (MACD) indicator and the Directional Movement Index (DMI) are in bearish territory, while the Relative Strength Index (RSI) and Commodity Channel Index (CCI) remain relatively neutral.