Is Apple Headed For A Blue-Sky Run? The iStock Trades In These Bullish Patterns Following Fed Call On Rates

Apple, Inc (NASDAQ: AAPL) was rising about 1.6% on Friday, continuing to trek mostly north within a rising channel pattern, which Benzinga called out on July 19.

The Cupertino, California-based company’s pattern is bullish, at least for the short-term.

Apple is also trading in an inside bar pattern, indicating a period of consolidation, which is usually followed by a continuation move in the direction of the current trend.

An inside bar pattern has more validity on larger time frames (four-hour chart or larger). The pattern has a minimum of two candlesticks and consists of a mother bar (the first candlestick in the pattern) followed by one or more subsequent candles. The subsequent candle(s) must be completely inside the range of the mother bar and each is called an “inside bar.”

A double, or triple inside bar can be more powerful than a single inside bar. After the break of an inside bar pattern, traders want to watch for high volume for confirmation the pattern was recognized.

Following the Federal Reserve’s decision on interest rates, when the central bank applied a 25 bps increase, volatility in the stock market increased. Traders looking for continuation in elevated volatility in the stock market can use MIAX’s SPIKES Volatility products. The products, which are traded on SPIKES Volatility Index (NYSE: SPIKE), track expected volatility in the SPDR S&P 500 over the next 30 days.

The Apple Chart: Apple’s inside bar pattern leans bullish for continuation because the stock has been trading higher within an uptrend. The most recent higher high within the pattern was formed on July 19 at the all-time high of $198.23 and the most recent higher low was printed at the $192.55 mark on Thursday.

If Apple breaks up from the inside bar pattern, the stock may find resistance at the upper ascending trendline of the channel. If the stock breaks down from Thursday’s mother bar, Thursday’s high-of-day will serve as a lower high, which will negate the downtrend.
If Apple eventually breaks up from the channel, the stock could be in for a blue-sky run with only psychological resistance levels above. If the stock breaks down from the channel, a longer-term downtrend could be on the horizon.
Apple has resistance above at the all-time high and at $200 and support below at $194.48 and at $189.61.