Apple, Inc (NASDAQ:AAPL), Meta Platforms, Inc (NASDAQ:FB) and PayPal Holdings, Inc (NASDAQ:PYPL) are all trading higher in strong uptrends. An uptrend occurs when a stock consistently makes a series of higher highs and higher lows on the chart.
The higher highs indicate the bulls are in control while the intermittent higher lows indicate consolidation periods. Traders can use moving averages to help identify an uptrend with rising lower timeframe moving averages (such as the eight-day or 21-day exponential moving averages), indicating the stock is in a steep shorter-term uptrend and rising longer-term moving averages (such as the 200-day simple moving average) indicating a long-term uptrend.
A stock often signals when the higher high is in by printing a reversal candlestick such as a doji, bearish engulfing or hanging man candlestick. Likewise, the higher low could be signaled when a doji, morning star or hammer candlestick is printed. Moreover, the higher highs and higher lows often take place at resistance and support levels.
In an uptrend the "trend is your friend" until it’s not and in an uptrend there are ways for both bullish and bearish traders to participate in the stock:
- Bullish traders who are already holding a position in a stock can feel confident the uptrend will continue unless the stock makes a lower low. Traders looking to take a position in a stock trading in an uptrend can usually find the safest entry on the higher low.
- Bearish traders can enter the trade on the higher high and exit on the pullback. These traders can also enter when the uptrend breaks and the stock makes a lower low indicating a reversal into a downtrend may be in the cards.
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The Apple Chart: Apple reversed course into an uptrend on Feb. 24, which was confirmed when the stock printed a higher low on March 1 at the $162.14 level. The stock has since made a higher high on Thursday at $168.91, which was above the most recent high of $165.25 printed on Feb. 25.
- On Thursday, Apple was trading down slightly from its high-of-day but on lower-than-average volume, which indicates a period of consolidation is taking place.
- Traders not already in a position may want to wait for the next higher low to print before entering into a position and if Apple closes the trading day near its low-of-day the higher low may come on Friday.
- Apple has resistance above at $167.88 and $171.03 and support below at $162.14 and $157.26.
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The Meta Chart: Meta may have reversed course into an uptrend on Feb. 24 and printed a higher low on Thursday, although a higher high above the Feb. 28 high-of-day at $213.15 will be needed to confirm the pattern.
- Meta’s relative strength index (RSI) is measuring at about the 31% level. When a stock’s RSI nears or reaches the 30% mark it becomes oversold, which can be a buy signal for technical traders and can cause the stock to bounce up higher.
- Like Apple, Meta’s move slightly lower on Thursday is on lower-than-average volume, indicating consolidation, which shouldn't concern bullish traders.
- Meta has resistance above at $216.15 and $230.31 and support below at $200.69 and $190.14.
The PayPal Chart: PayPal also bounced up higher on Feb. 24 after hitting a support level at the $94.50 level. The bounce higher caused the stock to quickly regain an important psychological support level at $100.
- Like Meta, PayPal hasn't confirmed a trend change to the upside but as long as the stock holds above $94.50 when it completes its next bounce up, the higher low will print.
- On Thursday, PayPal was trading slightly down on lower-than-average volume in a similar fashion to Apple and Meta.
- PayPal has resistance above at $115.39 and $124.85 and support below at $103.72 and $94.50.
