September Bull Flag and Support Planning for Apple AAPL

Sep 3, 2013: 11:30 AM CST

With the recent breakout and short-term bullish trend reversal, Apple (AAPL) shares have continued higher to close above the 200 day SMA.

Let’s focus on a key price level and potential bull flag or retracement set-up that’s developing at the moment.

AAPL Apple Daily Chart Bull Flag Trade Planning Technical Analysis

A quick glance at the chart shows the critical support ‘polarity’ level into $480 per share which reflects a swing low from January and a swing high from February 2013.

Divergences and a Rounded Reversal Pattern through the start of 2013 took us to this point with the August breakout and current pullback (retracement).

We saw a very shallow but effective “Bull Flag” or retracement at the start of August which preceded the $480 resistance breakout.

Now, we’re motioning price action relative not just to the rising 20 day EMA ($485.60) but also the $480 Price Polarity (reversal) zone.

The strength in Momentum and spike-up in Volume do suggest higher prices, or at least that momentum and volume continue to confirm the recent upward motion in prices.

For objective game-planning, we can’t just automatically assume price will trade up from here – we need to plan an alternate thesis or “Bearish Breakdown” thesis which would trigger on a return under $480.

At that point, we would expect stop-losses to trigger (and short-sellers to enter) which could result in a swing down to the $460 price and moving average confluence.

For now and likely the rest of the week, continue to focus on price action relative to the $480 level above.

Check out these prior updates on Apple for additional insights, trade descriptions, and lessons:

An August Breakout and Trend Reversal for Apple (AAPL)

Apple (AAPL) Trades into Confluence Resistance Inflection Zone

Dual Upside Projection for Apple and Future Levels to Watch (playing out now)

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Corey Rosenbloom, CMT
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