A Big Drop and Breakdown for Apple AAPL into Target

Aug 4, 2015: 10:30 AM CST

Apple (AAPL) shares entered distribution mode with a breakdown under support and the 200 day SMA.

What’s happening now and what downside support levels are valid targets?

Let’s start with a zoomed-in Daily Chart view of Apple (AAPL):

First, start with a prior update from July appropriately titled “Apple Breaking Down – New Price Level Planning.”

Note how I specifically targeted the $115.00 per share area which was achieved and exceeded today.

Also check out the three highlights on the Volume Chart which displays distribution ahead of this week’s collapse.

After a Bear Trap took price just shy of all-time highs above $132.00 ahead of earnings, bears took over and gapped price back to the key support level near $122.00 per share.

After a failed rally, sellers then broke price under the 200 day SMA Monday and we’re seeing the continuation liquidation collapse the price straight into the current level.

Let’s focus on the critical importance of this level – the $114.00 per share region:

We can also spot a messy Head and Shoulders Price Pattern amid the distribution top into $130.00 per share.

Nevertheless, we have two recent Fibonacci Retracement grids taken from the October and December lows.

The first level – 38.2% (green) was the $123.00 per share level which formed an initial support bounce through most of 2015.

However, in July sellers broke price under support and we saw an initial rally off the 50% (green) level along with the blue 38.2% overlap.

At this point, price collapsed into the $114.00 level which is very important for traders.

First, it’s the spot that fills the upside gap in January 2015.

Second, it is a two-time spike resistance price level at the beginning of the year.

And finally, it is the 50% Fibonacci Retracement as drawn – $114.30.

What now?

Look for buyers to step in aggressively at the $114.00 per share level – buyers would place stops logically under $114 and $113.

Thus if price fails to bounce/rally immediately up off the $114.00 target which was achieved, then look for a continuation of the distribution sell-swing toward the next lower support target into $110.00 per share.

Under $110.00 is the $105.00 support shelf also from the beginning of the year.

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Corey Rosenbloom, CMT
Afraid to Trade.com

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5 Responses to “A Big Drop and Breakdown for Apple AAPL into Target”

  1. Apple Shares Breakdown Under Support Says:

    […] By Corey Rosenbloom […]

  2. A Dynamic Drop into Support for Strong Trender Disney DIS | Afraid to Trade.com Blog Says:

    […] Drop into Support for Strong Trender Disney DIS Aug 5, 2015: 1:08 PM CST Not to be outdone by Apple’s (AAPL) big gap into support yesterday, strong trending stock Disney (DIS) disappointed investors and dropped straight into a key support […]

  3. Tarun Says:

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  4. Apple AAPL Big Drop into Bigger Buy Support Target Update | Afraid to Trade.com Blog Says:

    […] “A Big Drop and Breakdown for Apple into Target” (August 4) […]

  5. Apple AAPL Big Drop into Bigger Buy Support Target Update | Margin of Safety Says:

    […] “A Big Drop and Breakdown for Apple into Target” (August 4) […]