For the last several months, Apple (AAPL) has been a stock to avoid, and in my opinion continues to be a short-term trading vehicle despite this recent gap higher.
That's not to say AAPL is bereft of any encouraging signs.
The daily chart above exhibits what appears to be a bottoming process occurring for AAPL. Since the gap down on high volume in January, the stock has rallied and retraced within an approximate 400-450 price range. If anything, a triangle is beginning to form starting from the low established in April. Note also the volume spikes with recent held lows, further indicative of bottoming action. Another encouraging sign is the positive divergence developing with the MACD, as it's been gradually carving out an uptrend as price has been either trending down or sideways.
However, too many negative signs remain in place to keep the weight-of-the-evidence tilting bearish. For one, the chart above shows that a bearish Death Cross occurred in December (orange circle); to reverse this bearish signal requires a bullish Golden Cross (50-day MA rising up through 200-day MA), which is still quite a ways off from occurring.
The daily chart below shows a relative chart of AAPL (vs. SPY), depicting a more bearish picture.
Despite the fact absolute price (black line) is showing some life, rallying to the levels of early last month, relative price (red line) is barely moving and remains well below its higher early-June levels -- a bearish divergence. The upper inset shows the RSI for the relative price and it continues to more or less oscillate within a lower-bounded 55-20 range. For AAPL to begin to truly exhibit bullish behavior, relative price RSI will need to meaningfully break out of this range and surpass 70.
Below is the weekly relative chart.
Relative price broke down through a long-term rising trend line late last year, and more recently has succeeded in breaching a precipitously declining trend line. What concerns me most about the above chart is the stochastic (lower inset). As I've discussed before, not all overbought (oversold) conditions are the same. When momentum is extremely positive and remains so for an extended period of time ("good overbought"), price tends to kick into another gear and further ascend. Such conditions represent thrust and frequently have significant carry-through effects. Note in 2009, the weekly stochastic remained very elevated (80+) for much of the year, initiating what would become a multi-year relative performance run. On the flip side, the stochastic had been severely repressed from late last year into much of this year ("bad oversold"). Although the stochastic has since risen above 20 and has held above there, such downward thrust typically does not dissipate easily, meaning relative price is likely to remain under pressure in the near future.
Finally, I wanted to show money flow for AAPL.
In general, money flow (red line) has been negative for AAPL all year, inferring underlying distribution of the stock. Even as price has risen this month, money flow has not confirmed, remaining negative.
A longer-term chart shows that it's been prudent to have money flow confirm price action.
All in all, AAPL is exhibiting some encouraging signs as it looks to put in a bottom. However, enough bearish indications exist to keep me uninvolved, for now.