Last time I posted charts on my blog it was on Oct 1st, talking about how I felt the market will react the rest of the year. I pointed out the reasons why I felt the market was going down (election, fiscal cliff, XLI & IYT divergence) and the S&P has been down 5% since. I hope this helped everyone that read.
Now I wanted to talk about where I think AAPL will be headed in the coming weeks/months. Everywhere you turn this is in the headlines, seeing equal coverage along with the ‘fiscal cliff,’ ‘Obama,’ and the ‘EU.’ Lots of people have a position in this stock, whether it be long or short, including myself. This post is meant primarily to get my own thoughts out and is based 100% on technicals. Of course when you dive into the fundamentals, you’ll find a loads of information pushing you to various directions, but I will be giving this outlook solely from a technical standpoint.
First lets look at how AAPL has been doing over the past few years:
We have had a clear uptrend since March 2009, with only a few minor pullbacks and even a larger, secondary pullback more recently from April to May ’12. The largest retracement was from Apr-May, which was approximately 43%. This is below what I consider the important mark of 50% being the max a secondary pullback should be. Anything more, I begin to lean towards and entertain the possibility of a a new downtrend. From the chart above, you can see the most recent pullback has given back nearly
100% of gains from the wave that started in March. That is not good. A move like this cannot be spun as bullish in any sense of the word.
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