Chart of the Day – $AAPL vs. $RIMM

Here’s a preview of what I’ll be discussing on Talking Numbers today between 3:10 and 3:20 pm EST on CNBC:

Has AAPL finally bottomed, at $435 yesterday? I presented a couple charts on Friday arguing for an imminent change in the stock’s downtrend. One more chart that argues that the stock has become extended on the downside is the distance of AAPL from its 200 day moving average:

3 year chart of AAPL with 200 day ma, Courtesy of Bloomberg

With AAPL more than 20% below its 200 day ma, it’s in a rare extended position. The only time during the uptrend over the past couple years that the stock got more than 20% above its 200 day ma was when the stock had its parabolic top that eventually proved unsustainable.

AAPL is overextended to the downside with multiple indicators pointing to selling exhaustion.

On the other hand, RIMM has had an enormous 2 month rally, though the stock is down almost 15% this week. Here is the 1.5 year chart, on which I’ve shown the $20 level in red, which was previous support that has not been tested ever since it broke in late 2011:

1.5 year chart of RIMM, Courtesy of Bloomberg

But just like AAPL’s relative momentum has improved even as the stock has made its recent low, RIMM’s relative momentum has declined on each subsequent lunge higher:

1 year RSI chart of RIMM, Courtesy of Bloomberg

The stock has been making consistently higher highs since November, but each subsequent breakout has been on the same or lower momentum as measured by the RSI. With this backdrop, I view RIMM’s rally as long in the tooth, and likely close to over at this point.

These two stocks are night and day in terms of the fundamentals and business trends. But the comparison of the technicals is interesting, as both stocks look to be near inflection points, one potentially making a short-term bottom and the other potentially making a short-term top.