$AAPL - a rear view mirror on technical divergences

Tracking risk appetite across bipolar asset markets

FRIDAY FEBRUARY 8, 2013       16:52:00 GMT

The following weekly chart for Apple (AAPL) demonstrates - convincingly to my mind - the value of technical analysis and in particular the reason why being vigilant for negative (and positive) divergences can be very rewarding.

In particular as the large arrows on the different panes of the chart reveal there was a failure for the upward price trajectory - especially noticeable in Q3, 2012 - to be confirmed by three key technical indicators. The arrows for MACD and RSI have a very striking downward slope, and even that for the weekly MFI which has a less divergent slope but rather a plateau formation is indicating that accumulation was not taking place during the run up to the $700 level.

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