AAPL Triangle Breakout

Jul 8, 2007: 9:24 AM CST

This week, AAPL, as a likely direct result of the success of its iPhone sales/hype, broke out of a triangle consolidation chart pattern.

Remember the market rule “Price alternates between expansion and contraction” as supply and demand gets imbalanced following a period of quiet (rangebound) trading.

aapl-triangle.jpg

Price is now extended short-term above the upper bollinger band, and almost all oscillators are showing overbought conditions.

Use this as a study in the pure triangle consolidation pattern.  The buypoint would be slightly (enough) above the apex, or at least outside the converging trendline.  A stop would be placed either on the other side of the trendline (aggressive) or within the trendline following the break (conservative).

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