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Finance,  Technology

When to buy Apple’s stocks (AAPL) for a profit? A technical analysis (March 2021)

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NoteThe information in this article is NOT financial advice.

 

Outline

 

Apple’s stock (AAPL) price is plotted against time. Each price point is the average of the stock price over a day, and the window is for a year. When indicators, such as Bollinger Bands, are considered, patterns can be observed, and these patterns can be used to make inferences about how the stock price will fluctuate in the future. In what follows, a date will be determined to be the time after which Apple’s stock price may rise. (TD Ameritrade’s platform thinkorswim is used.)

Bollinger Bands

Bollinger's Bands - Apple stocks
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When the Bollinger Bands are superimposed against the price plot, a pattern can be observed: when the price crosses, touches, or nears the lower band, it eventually crosses, touches, or nears the upper band (see image). Also, when the trend of the mid-band is positive, the price tends to stay above the mid-band; when the trend of the mid-band is negative, the price tends to stay below the mid-band.

Volume

Volume - Apple stocks
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When the price crosses, touches, or nears either the lower or the upper band, there is an uptick in the volume chart (see image). The uptick can occur slightly after the price crosses, touches, or nears the lower or upper band. By an uptick, we mean a rise in the volume, where the volume for the day before and the volume for the day after the uptick are lower than the volume that causes the uptick.

Relative Strength Index (RSI)

rsi - Apple stocks
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When the price goes up, so does the RSI, and it goes down when the price goes down, roughly (see image). When the value of the RSI nears 30, the price tends to cross, touch, or near the lower Bollinger Band, and when the value of the RSI nears 70, the price tends to cross, touch, or near the upper Bollinger Band. The trend of the RSI graph tends to coincide with the trend of the Bollinger mid-band. When the price crosses, touches, or nears the upper Bollinger Band and the volume gets higher than usual, the RSI stays above the 70 line for some time.

Moving Average Convergence Divergence (MACD)

macd - Apple stocks
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When the price has a positive (upward) trend, the cyan line in the MACD chart is above the yellow line, the farther apart these lines are (or the more they diverge), the more positive the price trend is. When the price trend turns negative (downward), the cyan and yellow lines meet (or converge) and cross each other, and the yellow line is above the cyan line; the farther apart they are, the more negative the price trend is.

When to buy Apple’s stocks for a profit?

buy order - Apple stocks
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On March 8th, 2021, Apple’s stock price touches the lower Bollinger band, which suggests that the price may rise. There is a slight increase in the volume, which suggests some increase in trading activity. The RSI value is at the 30 line, which suggests high momentum. Although the yellow line of the MACD is above the cyan line, both lines start to converge after that date, which suggests there may be a change in trend, from negative to positive. Therefore, Apple’s stock price is likely to increase after March 8th, 2021. However, the trend of the Bollinger mid-band is negative, and the upper and lower Bollinger bands are merging to the mid-band, which suggests a lower volatility in the price, so the price may not rise too much if it ever does.  

Last Words

Based on the patterns of the Bollinger Bands, Volume, RSI, and MACD, Apple’s stock price is likely to rise after March 8th, 2021. Because of the negative trend of the mid-band, the rise in the price may be small.

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