Yesterday, I tweeted that Apple’s (AAPL $549.44) 9-day Relative Strength Index (RSI) was at the May, 2012 low and suggested to shorts that prudent risk-management would include tightening stops or lightening up on their short positions. According to the last short interest report, there is a relatively decent short position, as the shorts are at 2-1/2 year highs.
This morning, I tweeted that AAPL’s dividend yield is 2 percent, implication being value players could very well be supportive at these levels.
Taking a step back at the bigger picture techncial backdrop, AAPL could be a buy here for stock traders or option traders with a 2-3 month time frame. Your target would be a move to $650, its April high, with a stop around $515, its 320-day moving average.
The daily chart below since 2009 captures what I am seeing:
1. Its 320-day moving average, which marked the low in June 2003, July 2006 and March 2008
2. The potential 2012 “double bottom” in the $530 area – this morning’s low was $533.72
3. The oversold condition, according to AAPL’s 9-day Relative Strength Index (RSI) – second pane in chart
4. The relatively high short position – third pane in chart