Cool MA Consolidation in Apple (AAPL)

Mar 20, 2008: 12:53 PM CST

I wanted to point out a quick little pattern in Apple (AAPL) on the 5-minute chart today that I found very curious.

I zoomed in on the area of interest. Notice how the 5-minute bars respond virtually perfectly to the falling 50 period moving average and the rising 200 period moving average.

What’s interesting to me is that the moving averages are almost trend-lines that drew themselves! You may be thinking, “I didn’t know my software drew trendlines for me automatically!”

In reality, it was just an interesting ‘fluke’ that I wanted to spotlight. The pattern formed a symmetrical triangle that served as a continuation pattern, complete with a ‘throw-back’ test trade.

Recall that today is the last day to unwind options contracts (as well as “quadruple witching”), and so it’s not surprising to see such massive consolidations and seemingly random movements.

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