I posted on Stocktwits what I would describe as a warning on AAPL this weekend, and it was met with some tension. I am not one of those that runs around trying to scare the world with bold, factless statements. I just believe that the writing is on the wall, that this stock, like many others is in potential danger of further downside.
I really don’t want to hear fundamental arguments etc. Everything I need to know is described in the price action, so let’s review what I see.
Over the course of the first 7 months of the year, the stock trade in a range. It set a lower high on 7/20 – 7/21 which created the peak of the right shoulder. The target on a break below 121.63 was 108.72. That target was acquired rather quickly as you can see from the chart below.
So where does that leave us now? Well after an oversold bounce to the 50DMA, we have the potential for another right shoulder. Keep in mind, in corrections, we will see multiple bearish setups trigger, and this is the 2nd major one under construction. If we break and close 104.64, that would trigger this pattern, with a target down around 77.
Still laughing? Ok, well let’s just go back and look at AAPL’s last correction in 2012.
Still laughing? Well then not everyone can be helped, I can only lead a horse to water.