AAPL Apple Monthly Chart; Head and Shoulders (H&S) Pattern; Battle at the Critical 130-140 Support

Apple is another top that Keystone called as the year started. The SPX monthly chart (broad US stock market) topped out with negative divergence on the monthly chart and the same-o neggie d was on full display for AAPL (red lines). It was an easy peasy top call as the Wall Street analyst idiots told everyone to buy Apple with both hands.

The purple stars show how price was overextended to the upside above the moving average ribbon so AAPL desperately wanted a mean reversion lower. Apple tried to puff its chest out as the rout on stocks began early this year with analysts telling you that AAPL would hold up better. Wrong. The neggie d spandown is in full swing and Apple sinks into a malaise falling from the 182 top to 132 a -27% crash during the last year.

Trading is always about what comes next not what is in the rearview mirror. The Apple monthly chart above shows that price has formed a head and shoulders (H&S) pattern. With a head at 182 and neckline at, let's call it 132 for easy math, the difference is 50 points so if the 130-135 neckline fails, price will likely seek the 80-90 landing zone.

Keystone's 80/20 Rule says 8's seek 2's on the way up and 2's seek 8's on the way down so a breach of 120 opens the door to 80.

The monthly chart indicators are universally weak and bleak (red lines) which reinforces the downward trend for AAPL on a monthly basis so well into 2023. The upper band was violated so the middle band occurs and the lower band at 123 remains on the table. AAPL has only started to roll over this year. You ain't seen nuttin' yet.

Apple's destination a year or two out is likely the 40 to 80 range. Price will eventually trace back to the 200-mth MA, and lower, which is currently down at 40. The 55 level, double-nickels, is rock-solid support and may be the destination for 2023, call it the 55-90 area as the likely AAPL target for next year.

Now that all that doom and gloom is on the table for the long-term picture of Sap-ple, what does the intermediate and short term look like? Remember, trading is 5-dimensional chess balancing the monthly, weekly, daily, hourly and minute charts against each other. The hourly time frame is ready for a bounce right now so the day-traders will be on that today.

The daily and weekly time frames for AAPL are setting up with possie d. Thus, with the holiday period at hand, and Santy likely to show his red bourbon-ized face, Apple stock may be soggy for a few more days with the 123-132 area in play, but price should rally anytime and into early January (simply watch the charts develop for the timing).

As the monthly chart above shows, however, the gloom will return probably late January and the negativity in the monthly chart above will kick back into gear for an ugly 2023.

Thus, mathematicians say thus a lot, if you are a long shareholder of AAPL, you will likely have some time now, during the holidays, and as the year begins, to assess your Apple position. Apple is dealing with the Foxconn (Hon Hai) riots in China. This is a humongous manufacturing and assembly plant for Apple iPhones and other gadgets employing 200K Chinese folks and things are not going swimmingly.

China has likely stolen all the technology they can get by having Apple under its mainland wing so Dictator Xi and the CCP will have no problem starting to hassle Apple, kick Cook in his pants, and make life difficult for the company in commie China. Also, with a recession on the come in the US, a new expensive Apple gadget will not be on the shopping list.

The Apple longs will have to search their souls and decide if they want to take the toboggan ride lower in AAPL next year to the 55-90 area. Well, do you feel lucky, punk? Do you? Little Becky is sad that her AAPL stock Christmas present last year is underwater and she wanted a bicycle anyways. Don't buy your kid AAPL stock for a gift unless you want to teach them how to lose money in 2023.

Watch the H&S neckline at 135 like a hawk. The 130-140 range is a support/resistance battle zone for 2-1/2 years. Obviously, Apple bulls win big above 140. Apple bears win big below 130. 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.

Note Added Wednesday Morning, 12/21/22, at 9:37 AM EST: AAPL falls to 129 on 12/20/22 and is now trading at 134. Price dances between 130 and 140 deciding what to do.