Diego Thomazini
Apple (NASDAQ:AAPL) stock’s move to within $3 of its of its 200-day moving average grabbed BTIG technical strategist Jonathan Krinsky’s eye earlier this week. That comes as the tech giant’s stock had declined 4.9% in the past month.
“Should things weaken from here, we would pay close attention to how it reacts if it tests that level,” he wrote in a note to clients. In Friday’s trading, Apple (AAPL) stock rose 0.4% to close at 171.29, staying above the 200-day moving average of $166.09.
Bonds, though, are key. “We once again have the ‘potential’ for an inflection point, but we have to fully see it in the price action,” he said.
Krinsky pointed to the iShares 20+ Year Treasury Bond ETF (NASDAQ:TLT) trading over 200% above its average daily volume, which was on pace to exceed the previous week’s high, which was the second-highest volume day on record. “Closing back above (Wednesday’s) low (88.09) would be a start,” he said.
It did. On Thursday, TLT closed at $88.68. Note that TLT is still down 6.9% over the past month.
The bond action is important for equities, too.
“At this point, near-term equity upside is likely predicated on bonds stabilizing,” Krinksy wrote.
BTIG expects the correlation between bonds and stocks to eventually break, with “bonds up, stocks down, but that is probably a 4Q trade at this point.”
