Apple AAPL Big Drop into Bigger Buy Support Target Update

Aug 24, 2015: 11:59 AM CST

Apple shares (AAPL) declined with the technology sector and of course broader market recently, though shares instantly achieved – and rallied extremely powerfully from – a critical support target level which propelled shares higher.

Let’s see this level and update our analysis on this influential stock.

We’ll start with the Daily Chart of the range, reversal, plunge, and now power-rally off key support:

Like the broader market, Apple experienced a lengthy sideways trading range (rectangle) through 2015.

However, August saw the breakdown toward the first target – $112.50 per share – and then the bounce ahead of the current collapse in price.

Note the distribution pattern, divergences, and up-tick in sell (bearish) volume AHEAD OF the collapse.

Commit this pattern to memory so as to avoid major losses next time or take advantage of a future breakdown in other stocks that show a similar pattern.

What’s special – or magical – about the $92.50 level?  Why is (was) it an aggressive buying opportunity?

The Daily Chart doesn’t show it, so let’s turn to the Weekly Chart for a broader perspective:

Note the yellow highlight into the $92.50 level.

It’s the overlap (confluence) of the 2012 price high (which was actually $700 per share at the time ahead of a split), a pivot support in mid-2014, and the 50% Fibonacci Retracement.

It’s serving currently as a highlight aggressive – yet so far effective – spot to buy shares into a collapsing market for those brave enough to take the risk.

Either way, the $92.50 level was a higher timeframe (downside support) target that was achieved rapidly on the collapse down away from the $130 per share level (again, on divergences and distribution volume).

Price is already (in one day) above the $102.50 target (again, price and Fibonacci) so we’re looking at $110.00 to $115.00 as future upside potential weekly chart targets.

Note the lessons in this stock – on the breakdown and rapid recovery – and follow the price action closely.

Also note prior updates in Apple (AAPL):

A Big Drop and Breakdown for Apple into Target” (August 4)

Apple Breaking Down – New Price Level Planning.”

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Corey Rosenbloom, CMT
Afraid to Trade.com

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