Apple Inc. (NASDAQ: AAPL) seems poised for a price surge based on its latest charts. The company designs, manufactures, and markets smartphones, personal computers, tablets, wearables, and accessories worldwide. The company offers iPhone, Mac, iPad, and wearables, home, and accessories including AirPods, Apple TV, Apple Watch, Beats products, and HomePod.

Apple is currently exploring a potential deal with Perplexity AI. Backed by NVIDIA, Perplexity offers AI-powered search tools that generate concise information summaries, competing with rivals like OpenAI’s ChatGPT and Google’s Gemini.

Bullish Indications

#1 Downtrend Channel Breakout: As you can see from the daily chart, the stock had been trading within a downtrend channel during the past few weeks. This is marked in the daily chart in purple color. Currently, the stock has broken out of the downtrend channel with a high volume. Once the stock breaks out from a downtrend channel, it has the potential to move further up.

AAPL – Daily Chart

#2 Bullish Stoch: The %K line (blue color) is above the %D line (orange color) of the stochastic in the daily chart, indicating possible bullishness.

#3 Bullish RSI: The RSI is currently nearing 50 and moving higher in the daily chart. This indicates possible bullishness.

#4 Flag Pattern Breakout: The weekly chart shows that the stock was in an uptrend after which it started consolidating and was in a narrow range. This is a classic flag pattern and is marked in the chart in pink color. Currently, the stock has broken out of the flag. A Flag is a continuation pattern. Whenever a stock breaks out of the flag pattern, it typically continues its previous trend (uptrend in this case). The stock is also trading above its 200-week SMA. All these are possible bullish indications.

AAPL – Weekly Chart

#5 %K above %D: The %K (blue) line of stochastic has currently crossed above the %D (Orange) line in the weekly chart as well, and is also moving higher from oversold levels. This is a possible bullish indication.

#6 Bullish RSI: In the weekly chart as well, the RSI is currently nearing 50 and moving higher. This is a possible bullish sign.

Recommended Trade (based on the charts)

Buy Levels: If you want to get in on this trade, you can purchase shares of AAPL above the price of around $204.70.

TP: Our target prices are $228.00 and $245.00 in the next 3-6 months.

SL: To limit risk, place stop-loss at $192.00. Note that the stop-loss is on a closing basis.

Our target potential upside is 11% to 20% in the next 3 to 6 months.

For a risk of $12.70, our target rewards are $23.30 and $40.30. This is a nearly 1:2 and 1:3 risk-reward trade.

In other words, this trade offers nearly 2x to 3x more potential upside than downside.

Risks to Consider
The stock may reverse its overall trend if it breaks down from the trend channel with a high volume. The sell-off of the stock could also be triggered in case of any negative news, overall weakness in the market, or any regulatory changes in the sector.

Happy Trading!

Tara

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