AAPL – Fibonacci and a Secret Weapon?

Mar 26, 2008: 11:46 AM CST

Apple Inc (AAPL) has been on a steady recovery since its mid-February $115 ‘bottom,’ and has formed a rounded saucer bottom which could turn into a classic ‘cup with handle’ upon the next retracement which seems likely.

Price rounded up off the Feb. 25th low to enter a powerful and sustained ‘bull move’ up. Resistance is overhead via the 38.2% Fibonacci retracement (near $150) and the stabilizing 200 period daily moving average.

Also, notice the key lengthy positive momentum divergence that has been forming since early February.  That was a hint that higher prices were likely yet to come.

I would expect price to swing down temporarily off these levels before potentially heading higher. There is probably a lot of fight left in the Apple bulls, and I know many people have declared this is “not your old generation of stocks” and that “old fundamental rules don’t apply.” We’ll see how true that is in time, but it is true that Apple is a unique and distinct company that has captivated a large number of consumers with deep loyalty.

Adam Hewison of Market Club fame released an educational video today on Apple and potential bullish price targets he has on the stock.

Entitled “Apple’s Secret Weapon,” Hewison discusses some key chart points including support and resistance, throws in some Fibonacci analysis, and discusses signals generated by Market Club’s Triangle Technology that would have resulted in strong profits on the stock. The Triangles are signaling a new signal in the stock, Hewison reports. Check out the video for more insights from Adam, and to find out what he believes is Apple’s ‘secret weapon”!

As always, if you feel Apple stock is trading too high, or may have too much risk for you, there are various options strategies you can use to lock in profit and minimize risk if need be.

16 Comments

16 Responses to “AAPL – Fibonacci and a Secret Weapon?”

  1. Wizlo Says:

    Can someone please translate?

  2. Corey Rosenbloom Says:

    Wizlo,

    What language would you need it translated into? I’m looking at adding that kind of support to the site and will have it available as soon as I can.

  3. Joe Says:

    Your new blog layout is so much better. Thanks for your efforts. I’ve been learning to respect technical analysis and incorporate it into my trading strategy much more. Great+Thanks.
    Joe

  4. wilhouse Says:

    lol

  5. Ruffcut Says:

    It is good call, but with this volatility, it still makes me afraid to trade?
    Great blog.

  6. todd Says:

    Corey,
    First, I’d like to thank you for the work you put into this blog. I enjoy reading your posts and do learn from your perspective. This past weekend I was reading an archived post entitled “Rules of the Game and Victory through Manipulating Them.” It seems that just when you were getting to the meat of the subject I was left in suspense. My question is; Have you written a follow-up to that post? Specifically the attainment of victory in manipulating the rules part. Perhaps you followed up on that previous post and I haven’t found it in the archives? Again, thanks for your blog.
    -todd

  7. successfultradingtips.com Says:

    NICE LOOK YOU GOT GOING HERE COREY

    JOHN BOUGEAREL
    successfultradingtips.com

  8. Corey Rosenbloom Says:

    Hey Todd,

    I can revisit the thread if you like. I haven’t written one yet but I will note that and try to re-address the topic soon. Thank you for the suggestion and comment!

  9. eh Says:

    I bought AAPL in the 118s back in Feb but didn’t like the price action — it kept drifting down into the 116s, showing really very little strength — so I sold and haven’t wanted to touch it since. Stupid me.

  10. rickw Says:

    12.5 125.625
    25 136.25
    37.5 146.875
    50 157.5
    62.5 168.125
    75 178.75
    87.5 189.375
    100 200

    Hi, new to your site and I wondered if rounding off the fibonacci series creates problems for you? In looking at your chart, it looks like 150 is the crossover point. In fact 147 becomes the crossover with 0.38 and 146+ with 0.375.

    I have been following the fibonacci charts for this stock once it hit 200. I looked at the bottom and played it from there. It has been following along those lines ever since it hit 115. vacillating b/w 120-125, then finally exploding to 140+, blasting past the 136.25 marker as if it wasn’t there. But it seems that it is there and making an ugly reappearance. Would you say that the next entry point is 136 – 134, taking into account the options activity that will abound?

    Thanks.

  11. Corey Rosenbloom Says:

    Thank you Rick w for the comment.

    Awesome play in the stock! I suggest that the major 38% retracement will be a factor, but I see price going higher once a pullback occurs – sort of like a cup with handle formation.

    I think the pullback could occur, yes, to the $135 level with a stop somewhere beneath $130. I like options because they don’t require you to place stops (arguably) and you don’t worry about being nicked out and having the stock take off without you.

    Good thoughts there.

  12. Ruffcut Says:

    It is good call, but with this volatility, it still makes me afraid to trade?
    Great blog.

  13. Martin Eshleman Says:

    It's good to see other traders using the Fibonacci ratios like I do. The ratios can be used for more than retracing though. It's amazing. Nice site by the way.

  14. danielshilina Says:

    Yeah Martin, the Fibonacci ratios can be used effectively in channels, spirals, extensions, fans and time. And the Fibonacci ratios appear throughout nature so there is definitely something powerful about them.

  15. danielshilina Says:

    Yeah Martin, the Fibonacci ratios can be used effectively in channels, spirals, extensions, fans and time. And the Fibonacci ratios appear throughout nature so there is definitely something powerful about them.

  16. stochastic Says:

    stochastic…

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