Apple has fallen prey to the trade war-triggered market sell-off, tumbling 11% in just a week.
But a propitious development in its charts could signal a massive rally, says Matt Maley, equity strategist at Miller Tabak.
"It's seeing a golden cross. That's when a rising 50-day moving average breaks above a rising 200-day moving average, and I'm usually not a big fan of that indicator but it's been a very compelling one for Apple," Maley said Monday on CNBC's "Trading Nation. "
The last three times the stock experienced a golden cross – in 2009, 2013 and 2016 – it rallied around 540%, 110%, and 130%, respectively, through to its peak years after. From the occurrence in 2016, for example, Apple rallied through to its October high last year.
The latest golden cross formed in Apple's charts just late last week.
"So if this stock can turn back up, that indicator would tell you it just might be see a good run," said Maley.
Apple is not the only Dow stock struck down by tariff uncertainty. The index's ABC stocks — Apple, Boeing and Caterpillar — have each been in dizzying downturns since the trade war escalated at the beginning of last week.
Michael Binger, president of Gradient Investments, does not see anything favorable about the Dow's ABCs. Instead, he has identified other stocks with the same initials that would be better buys right now.
"If I had to pick an ABC portfolio today, I would pick Amazon for A – they just had a good quarter, momentum continues, it's a service and e-commerce company. For B, I would pick Bristol-Myers – I actually like the Celgene acquisition. I think it's going to be very accretive, " Binger said during the same segment. "For C I would pick Chevron – the Anadarko [deal], with the noise behind us, I think the market is going to focus on what are pretty darn good fundamentals. "
It's been a mixed bag for those three since the sell-off began a week ago. Amazon has fallen 7% in the past week, and Bristol-Myers is down 5%, while Chevron has gained 2%.
Disclosure: Gradient Investments holds Apple, Boeing, Amazon, Bristol-Myers and Chevron shares.
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