Chart technicians are keeping a close watch on the S&P 500 Index right now, warning that a head and shoulders pattern may be emerging. This week these concerns are heightening as the index moves further below the resistance level of 2075 to 2085 witnessed last week. At least some of the blame can be placed on Apple stock as its recent tumble could be forming its own bearish technical pattern. The iPhone maker’s massive market capitalization means that it has a heavy weighting in the S&P 500. In other words, when Apple stock falls, it has a greater bearing on the index than the other constituents.

S&P 500’s rally began with double bottom

Bank of America Merrill Lynch analysts Stephen Suttmeier and Jue Xiong noted in their May 13 “Chart Talk” report that the latest rally in the S&P 500 began with a double bottom chart pattern and question whether a head and shoulders top will end it. Last week the index stalled in the 2075 to 2085 range, a key resistance level, and they said that while it stays below this level, there is risk for a head and shoulders top coming off the peaks between late March and early May.

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The BAML analysts add that the rising 50-day moving average currently serves as a support at around 2054 but that it would require “a decisive loss of support at 2039-2033” to confirm that what we are actually seeing is a head and shoulders top. The S&P 500 currently sits at around 2060, as of this writing, after declining 0.3%.

Suttmeier and Xiong warn that if the index falls to the 2039-2033 level, we could see a substantial pullback to the 1965 to 1950 range, which they explain are the “top projection and February double-bottom breakout point). In order to negate the “potentially bearish” pattern that may be emerging on the S&P 500 chart, the index would have to push decisively above the 2075 to 2085 range.

Apple stock chart forming its own bearish pattern

The BAML team also warned last week that Apple stock has moved even lower than the bearish setup they warned investors about in late April. On Thursday, the iPhone maker’s stock closed below the support level that goes all the way back to the middle of 2014 at $92.50. Suttmeier and Xiong warned last week:

“While below $92.50-95.90, the bears have control, with risk to chart support at $82 and the April 2014 upside gap at $80.10-$75.87. The falling channel from mid-2015 confirms this risk. Should AAPL regain $92.50-95.90, there is plenty of resistance at $98.71-103.91 (downside gap) and near $108 (downtrend line and falling 200-day MA). AAPL remains a relative laggard vs. the S&P 500.”

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As of this writing, shares of Apple are up 0.12% at $93.99 after receiving a boost on Monday from the news that Warren Buffett’s Berkshire Hathaway had taken a stake in the iPhone maker.