Apple: Daily And Weekly Chart Analysis

Let’s take a quick look at Apple’s (AAPL) weekly chart (including an Elliott Wave count) and a closer look at the Daily Chart’s consolidation rectangle pattern.

Apple (AAPL) Weekly:

I would consider this Elliott Wave count a high-probability count, but it is not the only count available.  It’s also possible that this rectangle is actually part of a fractal Wave 4 of (C), which means the move out of consolidation will be a down-move.  However, for the time being - unless we get a down-move that breaks support at $80 per share - I would consider this a slightly higher probability Wave count.

This count assumes that we made a Wave 5 Peak just as 2008 began and then formed a quick Wave A down into the $120 level before swinging back up in a rapid and strong Wave B (3-wave), before forming a reversal and then heading lower into a 5-wave subdivided C Wave.

A positive momentum divergence has formed and price is respecting a rectangle trend channel.

Apple (AAPL) Daily:

On the Daily Chart, we see how price has created this rectangle consolidation (parallel trendlines) about the $105 and $80/$85 level.  The obvious play would be to wait for a break-out from this consolidation to play for a range expansion move, whether it comes on a break to the upside or the downside.

It would appear currently that price wants to head a little lower as a result of price being at the upper trend-channel resistance line and forming two doji (reversal/indecision) candles in a row last week.  The 3/10 Momentum oscillator is also starting to hook (turn) over at these levels.  Notice the Oscillator has stayed within a respected trend channel as well.

We really can’t use moving averages for analysis in a trading range, though the help show us the mid-point (or ‘value area’) of the range.  Price in a range doesn’t generally respect them for support or resistance (or to set up trades).

I’m also showing that Apple Inc has shown Relative Strength to the S&P 500 Index (^GSPC) since 2009 began.  Though prices stayed in a range, they did not decline, unlike the S&P 500 (which is off 15% year-to-date).  Apple is actually up (currently) almost 20% year to date.

Keep watching Apple for a breakout above $105 or a return back to the midpoint or lower channel of the current rectangle trading range.  Apple can’t stay in this range forever!

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