Apple Inc. (Apple (AAPL)) is trading higher on Friday, but don't let the recent dip fool you—the stock has fallen about 12% since the start of June. That kind of drop can feel scary, but it might actually be setting the stage for a comeback.

Here's the thing: Apple shares are now oversold and sitting right at a key support level. In the world of technical analysis, that's a pretty bullish setup. That's why Apple is our Stock of the Day.

What's driving AAPL shares up today?

Let's rewind a bit. Back in February and again in April, Apple ran into a wall at $275. Every time it tried to push higher, sellers stepped in, and the stock pulled back. People who sold at that level probably felt pretty good about it—until the resistance broke.

Once Apple finally blasted through $275, those same sellers started to second-guess themselves. They thought, "I sold too early." And now, they want back in—but only at the price they sold at. So when Apple recently dropped back to $275, they placed buy orders. That flood of buying turned the old resistance into new support.

On top of that, Apple is oversold. Look at the lower part of the chart—that's the Relative Strength Index (RSI). When the blue line dips below the lower red line, it means the stock is oversold. That's exactly where we are now.

Oversold conditions tend to attract buyers who are looking for a bargain. They expect a reversal, and their buying can create upward pressure. It's a self-fulfilling prophecy: more buyers push the price up, which draws in even more buyers.

Stocks often rally after hitting support. Here's why: the buyers who created that support get impatient. They know that sellers will sell to the highest bidder, so they start raising their bids to make sure they get filled. Other buyers see this and do the same. Before you know it, you've got a bidding war—a snowball effect that can send the stock higher.

So, being oversold while sitting at support? That's a powerful combination. Apple might be on the verge of starting a new uptrend.