Below is a weekly AAPL from September 2018… through Friday.
I connected the January and June 2019 lows and paralleled a line off the April top.
In November, AAPL struck the top of the trend channel.
Last week, AAPL turned its weeklies down for the first time since the end of September and reversed with authority back to the topside.
However, Monday AAPL got hit, unable to follow through to the topside… at least for the moment.
Remember, we’re looking at a weekly chart and so far we only have Monday’s action to judge the follow through or lack thereof.
While AAPL’s pullback to its 20 day moving average into Friday’s gap may be a textbook buy setup within the context of a runaway move, AAPL has a nasty habit of misdirecting players with false breakouts.
Friday’s breakout above a 3 week flat may end up mirroring false breakout on October 3, 2018.
The key will be its ability to hold its 20 day moving average.
Failure below the 20 day ma. with follow through below last weeks low targets the 242 region.
242 is the mid-channel line as well as a trendline connecting the June, August and September lows.
There seem to be two potential square-outs on the table:
1) The 238 October 3, 2018 top in AAPL is opposite 270, Friday’s high.
2) The low for 2019 occurred on January 2 which aligns with 279.
279 is 90 degrees square October 3 and, at the same time, aligns with January 3.
232/233 top on 10/3/18 green arrow
Vibrates off start of runaway move on Oct 3, 2019
Both square low of the year, Jan 2, 2019
279 aligns with Jan 2 low and is square prior 232 ATH
Notice that 10/3/19 saw a runaway move begin from 215 while 10/03/18 was a top
360 degrees up from 215 is 27
9270 squares 142 the Jan 2019 low
My takeaway is that 270 sets up a correction. Alternatively, AAPL could continue to rally to 279 into early January.
How will we know if AAPL is on a trajectory to 242?
Well 90 degrees off Friday’s ATH is 255.
A break of 255 suggests another 90 degree decrement lower, which is 239.
Conclusion. As noted above, AAPL has a nasty habit of misdirecting players — the October top last year was a false breakout.
Likewise, the breakout this July over a declining trendline saw a quick 29 point sell-off in 4 days.
Notice that when AAPL cleared the July reversal it went into a runaway move — the 2nd mouse got the cheese.
Interestingly, the April top occurred with an outside up week — like last week.
When AAPL snapped the low of that outside up week, it triggered a Reversal of a Reversal sell signal, carving out a 45 point decline in just over 4 weeks.
If AAPL breaks last weeks lows, my expectation is for a minimum move to the 240 region.