Apple and Tesla relief rallies could have further to go, according to the charts
Apple Inc. (AAPL) and Tesla Inc. (TSLA) have been notable laggards within the megacap complex year-to-date. However, their short-term technical setups are compelling, and they are helping drive a megacap-led relief rally in the major indices. Apple was popping 3% on the day following an analyst upgrade . Tesla was surging Monday after CEO Elon Musk appeared to make progress on getting China’s approval to roll out its self-driving tech in the country. TSLA is showing signs that it can see a bigger relief rally after its positive earnings reaction last week left previous support intact in the $152 area. Today’s gap higher above the 50-day (10-week) moving average is associated with an oversold upturn in the weekly stochastics, which we see as a positive catalyst for the next few weeks. Next resistance for TSLA is at the weekly cloud model, denoted by the shaded area on the chart, near $200. The fact that TSLA has been able to generate an oversold rebound bodes well for AAPL, which is also above its 50-day moving average this morning. Last week, AAPL managed to avoid a confirmed breakdown below support in the $169-$170 area, which defines the bottom of a trading range. This creates a positive setup for the stock heading into its earnings report on Thursday, noting the weekly stochastics have a pending upturn from oversold territory. Resistance for AAPL is at the 200-day (40-week) moving average near $182. While short-term rallies are in place for AAPL and TSLA, they are both challenged longer term from a technical perspective. AAPL and TSLA have each seen their 200-day moving averages roll over in an indication that long-term momentum has deteriorated, which increases risk beyond the near term. With this in mind, combined with other long-term indicators, we view short-term relief rallies as counter-trend. —Katie Stockton with Will Tamplin Access research from Fairlead Strategies for free here . DISCLOSURES: (None) THE ABOVE CONTENT IS SUBJECT TO OUR TERMS AND CONDITIONS AND PRIVACY POLICY . THIS CONTENT IS PROVIDED FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSITUTE FINANCIAL, INVESTMENT, TAX OR LEGAL ADVICE OR A RECOMMENDATION TO BUY ANY SECURITY OR OTHER FINANCIAL ASSET. THE CONTENT IS GENERAL IN NATURE AND DOES NOT REFLECT ANY INDIVIDUAL’S UNIQUE PERSONAL CIRCUMSTANCES. THE ABOVE CONTENT MIGHT NOT BE SUITABLE FOR YOUR PARTICULAR CIRCUMSTANCES. BEFORE MAKING ANY FINANCIAL DECISIONS, YOU SHOULD STRONGLY CONSIDER SEEKING ADVICE FROM YOUR OWN FINANCIAL OR INVESTMENT ADVISOR. Click here for the full disclaimer. Fairlead Strategies Disclaimer: This communication has been prepared by Fairlead Strategies LLC (“Fairlead Strategies”) for informational purposes only. 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