Wall Street's bullish comments push Apple to a possible breakout zone on its chart

Published Tue, Mar 7 20239:15 AM ESTUpdated Tue, Mar 7 20239:51 AM EST

Patti Domm @in/patti-domm-9224884/@pattidomm

Apple shares got a boost from analysts at Goldman Sachs and Morgan Stanley in the last couple of days, sending its stock price squarely into a potential breakout zone. The stock traded above $156 Monday, for the first time since mid-February. It closed the session at $153.83, up 1.9%. Apple last closed above $156 in September. "The rally has lifted Apple up into strong resistance, creating a proving ground," said Katie Stockton, founder of Fairlead Strategies. "It's a hurdle. If it surmounts it, it's positive, but there's a good chance it's not going to." Stockton said, still, the level is an important area to watch. On Friday, Morgan Stanley reiterated Apple shares as a top pick. Then, on Monday, Goldman Sachs put a price target of $199 on the stock and said its services businesses could help give it a boost. AAPL 1Y line aapl Stockton said Apple could get to $158, the top of the resistance zone on its chart. But she would want to see two weekly closes above that level and expects that is not likely to happen just now. If Apple were to make a move and hold at a higher level, it would be good for the overall stock market. Apple is the largest U.S. stock by market capitalization, so it has an outsized influence on the S & P 500 and the Nasdaq. It is also part of the Dow Jones Industrial Average . "Obviously Apple really influences market sentiment, and so what we're going to look at at the same time is more of a market sentiment gauge like the VIX," she said. The VIX , CBOE's Volatility Index, closed slightly higher at $18.61 Monday, and Stockton said if it were to meaningfully break $18.45 and hold below it, that would be a contrarian positive signal for stocks. Scott Redler, partner with T3Live.com, said Apple could be sending a signal for the broader market. "It will be hard for SPX [the S & P 500] to be so weak if this acts well," wrote Redler. He said resistance is $155.50 to $157.50. "You think about Apple, where it was three days ago," he said. "It [now] traded into resistance. That was strong action for it. ... I think the next three days are important. You go from $145 into major resistance. Usually, the first time there it gets rejected. If it does well over the next few days, the next real area is the highs for the year. The highs for last year." Apple's 52-week high is $179.61 from March 30, 2022. "How Apple handles $156 to $157 will give us some clues as to whether this is just another bear market bounce," said Redler. He said testimony from Federal Reserve Chairman Jerome Powell before Congress Tuesday and Wednesday could influence the overall market.