Monday, January 14, 2013

AAPL Apple Daily Chart Sideways Channel Falling Wedge Apple Loses 500 Level Intraday

Orders for iPhones are scaled back so Apple is taking the pipe today. Analysts will likely have to lower their estimates moving forward.  Parts suppliers, including darlings such as QCOM and BRCM, are out back behind the shed receiving a beating as well. This is interesting news ahead of their 1/23/13 earnings release, seven trading days away.  In the pre-market, AAPL lost the 500 level.  In the regular session now underway, Apple lost the 500 level after the opening bell printing a 498.51 LOD thus far today. The two blue circles on the right-hand side show the 12/17/12 low print at 501.23, which was taken out today, and the 12/28/12 recent closing low at 509.59.  The numbers today now correlate to February 2012, about one year ago. That was after the blow-out January 2012 earnings report that catapulted the entire equity markets higher into springtime.

 The two tops show the negative divergence that was highlighted as the tops were called in April and September.  Note the 200-day MA curling over and now negatively sloped (green rectangle). That is not a good thing for the long-term. The green arrows show the positive divergence set-ups, and expected bounces. Price today is now a lower low and all the indicators remain positively diverged so a bounce would be in order, however, watch the RSI and stochastics since they can easily lose their prior lows (short red lines), and that would mean more weakness, or at least sideways action. This is important from the standpoint of the brown falling wedge now in play.  Falling wedges are bullish but this one appears to need more time to play out. The apex of the wedge targets 480-ish and note that there is strong support at 490-ish and 480-ish.  A fall lower than 480 will fill the gap from February and on closer inspection note the other gaps from February that will all need filled eventually. A sideways channel at 500-550 remains in play (pink lines).

 Watch the three numbers listed above as today plays out. There is probably no reason to be long or short Apple right now.  Projection is sideways choppy action lower for Apple with a bounce from 480-490, out of the falling wedge, which may provide an attractive entry area for a long. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.
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6 comments:

  1. ArnieJanuary 14, 2013 at 11:42 AM

    great chart of KS! This is something to keep in your back pocket, and trade accordingly. Sitting on my hands and waiting to press the "buy" button... ;-)

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    1. WeaverJanuary 14, 2013 at 11:58 AM

      Arnie, where are you now on your EW count on the overall markets (SPX)? Avi Gilburt was looking for 1494ES, but warned that any break below 1462ES and he would expect a correction first (we fell below that by a bit this morning, before recovering). And a correction through today and tomorrow, of course, would jive with KS's thoughts. (I can't see Bernanke after the close, however, doing anything but reinforcing the need for more QE - clarifying the recent FOMC minutes. And I'm sure he'll have some stern words for the next Congress.)

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    2. WeaverJanuary 14, 2013 at 12:08 PM

      Arnie, just to be completely accurate, Avi's now saying the near-term top this week could be 1474-84ES. Here's a link to his update:
      http://www.marketwatch.com/story/potential-whipsaws-ahead-for-sp-500-2013-01-14?link=MW_latest_news

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    3. ArnieJanuary 14, 2013 at 4:59 PM

      Weaver, thanks for the link to Avi. I haven't followed him for a while, because he's been swinging from bear to bull to bear to bull count like a teen age girls changes her outfit. ;-)

      I know one has to do what the market dictates, but following his count, the last tradeable move his count provide was from 1412 to 1448 if I recall...

      It's hard to count this mess we've had now; could be a leading diagonal, which is bullish. Seems like the market is waiting for a catalyst, a reason to break out. Sure looked like it this morning... AAPL put a halt to that. Despite this SPX only down 1.4points...

      So if you want to trade every move and squiggle the market makes, the past days were really hard. If you're in it for the longer run, then I still see ~1550s as a logical upside target for this 3rd wave to complete. Then a 4th wave (which cannot drop below 1475) and a 5th wave to either 1550 or 1600. The past 5th waves were weak/failed, so it may not make it beyond 1550ish.

      That 5th wave should finalize a higher degree 3rd wave. Next, again, a 4th wave, which often retraces to the previous lower degree 4th way (say low 1500s), followed by a final 5th wave to 1600s at the most. This concludes a big cycle and we should drop to 1100s again... This is rather in line I see now with Avi's count. Note that these mostly 3rd, 4th and 5th waves at several degrees will likely make for a choppy market, indicating topping behavior. However, each move should be tradeable IMHO with 50-100 point moves. It's just that the markets won't go much anywhere in any direction. Classic topping pattern!

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    4. WeaverJanuary 14, 2013 at 7:06 PM

      Thanks Arnie. Really appreciate the update.

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  2. Keystone SpeculatorJanuary 14, 2013 at 12:31 PM

    The interesting thing with Chairman Bernanke later on today will be the questions since speakers can be tripped up and say something that rattles the markets if the question catches them off guard.

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