Trading Idea: What to Expect as Apple Breaks Resistance

Published on Tuesday, 07 August 2012 05:44 Written by TradersHuddle Wire

New York, August 7th (TradersHuddle.com) - Shares of Apple, Inc. (NASDAQ:AAPL) closed the session at $622.55 just above calculated resistance at $616.40. The stock effectively broke out and grasped the attention of momentum traders, which could eventually push the stock to a different trading range.

Apple Inc. (NASDAQ:AAPL) designs, manufactures, and markets personal computers, tablet computers, mobile communication devices, and portable digital music and video players, as well as sells various related software, services, peripherals, and networking solutions. The Company sells its products worldwide through its online stores, its retail stores, and a variety of distribution channels. Apple through its ITunes store sells third party music and video content, its applications store sells Apple's own and third party software applications for its iPhone iPad, and iPod products.

The stock was trading in a well defined range with support at $570.00 and resistance at $616.40. Given that this range was broken, traders will be closely monitoring Apple's price action to gather clues on the future direction.

From a technical perspective, it can be expected that previous resistance becomes support, as the new range gets defined. However, given that Apple is still near the broken resistance level, traders will be focusing on the $616.40 level to see if the stock holds the breakout without rolling over.