![Apple Stock Breaks Through Resistance](https://www.forexbrokersreview.org/img/e9911c20-6993-4005-9faf-48b5ca3ddba4/news-article-14.jpeg?fm=jpg&q=80&fit=max&crop=1920%2C1080%2C0%2C0&w=810)
Apple Inc.'s stock has experienced a strong rally in recent weeks, successfully breaking through the resistance that had been holding it down for the past three months. This signifies that the technology giant's stock is back on track to reach its all-time highs.
The stock (AAPL) rose by 1.6% on Tuesday, reaching a two-month high in the afternoon trading session. Over the past eight sessions, it has soared by an impressive 9.1%, marking its best eight-day stretch in a year.
This significant increase confirms that Monday's rise, which surpassed the downward sloping trendline that started at a record close of $196.45 on July 31 and connected the Sept. 5 close of $189.70 and the Nov. 2 close of $177.57, has effectively reversed the short-term downtrend.
Dow Theory and Tracking Trends
According to the Dow Theory, a well-established market analysis concept that has stood the test of time on Wall Street for over a century, a trend remains in effect until it shows a clear signal of reversal.
Drawing a trendline with at least three connecting points is considered the most effective way to track a trend, and a definitive break of this trendline serves as the best signal for a reversal. Find out more about the popular trading maxim, "the trend is your friend."
With the reversal of the three-month downtrend, it can be inferred, according to observers of chart patterns, that there is always a bigger trend at play and that the previous longer-term uptrend, which started in early January, is now set to resume.
Overcoming Resistance and Future Outlook
However, it is important to note that breaking through the resistance does not automatically guarantee that Apple's stock will return to its record territory.
There is likely to be a resistance zone ahead, marked by the Sept. 5 closing high of $189.70 and the point where the previous uptrend line was broken, approximately at $192.90.
On the downside, there is support at the recent breakout point, around $177.60.
Overall, while Apple's stock has made promising gains and reversed its downtrend, there are still obstacles to overcome before it can make a significant climb back to its previous highs.
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