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Apple Inc. - (AAPL) - March 5, 2024

In the January 18th edition of the Daily Stock Report, we noted that the relative strength of Apple (AAPL), one of the highest market cap stocks in the world and part of the “Magnificent Seven”, was starting to weaken. Since then, Apple has continued to tumble down the rankings in the SIA S&P 100 Index Report dropping 11 spots in the last month.

Yesterday, Apple fell into the Red Unfavored Zone for the first time since February of 2023. Year to date, AAPL shares are down 8.9%, in contrast to gains of 8.5% for the S&P 100 Index and 7.9% for the NASDAQ Composite Index. A major breakdown is underway in Apple (AAPL) shares. Back in February, a rally peaked at a lower high. Since then, AAPL has come under distribution, as shown by the emerging downtrend of lower highs.

In the last three days, it has become clearer that a new downtrend has started. The shares snapped a second downtrend line and then took out $180.00 support, completing a bearish Descending Triangle pattern. These breakdowns have occurred on a big jump in volume, a sign that selling pressure has increased.

Next potential support appears at the October low near $166.00, then closer to $160.00 based on a measured move. Initial resistance appears at the $180.00 breakdown point.

This 1% chart shows how after staging a big rally through the first eight months of 2023, Apple (AAPL) shares seem to be losing their way. Between August and February, three attempts to break through resistance near the $200.00 round number failed. Since the latest peak in February, the shares have started to backslide, with a bearish Double Bottom breakdown signaling that bears have started to gain the upper hand.

Initial downside support appears at the October low of $165.90. Should support fail there, current weakness would change from a correction within an uptrend to the start of a new downtrend. Should that occur, next potential support may appear in the $147.35 to $153.25 zone where previous column highs/lows and a vertical count cluster around the $150.00 round number. Initial resistance on a bounce appears near $190.60 based on a 3-box reversal.

With a bearish SMAX score (which is a near-term 1 to 90-day indicator comparing an asset against different equal-weight asset classes) of 5 out of 10, AAPL is exhibiting short-term weakness against the asset classes.

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