Stepping Inside the Rise and Fall of Apple AAPL into 100

Sep 3, 2014: 2:58 PM CST

Apple (AAPL) shares shook traders today with a “Trap and Collapse” outcome that threw price back to a short-term target level.

Let’s update our Apple charts and step inside the recent action.

For a bit of background (and real-world education), take a look at my prior update entitled “Charting Apple Through the $100 High.”

As was suggested, price continued its upward journey (fueled in part by the stop-losses of the bears which triggered a short-squeeze breakout) through the $100 level.

However, recent headline news and an overbought price resulted in selling pressure, both from buyers taking well-deserved profits as sellers struck the stock with new short-sale positions.

Nevertheless, price now trades into an inflection level which was the prior high near the rising 20 day EMA (and $100 simple reference target).

We can see this clearer on the hourly chart (plus a Fibonacci Grid):

The 50% or halfway Fibonacci Retracement at the $98.50 level rests near today’s low price.

Watch this level along with the 200 hour SMA ($98.30) for a potential pivot point for shares.

A further breakdown under $98.50 then $90.00 suggests price will continue its decline toward the $97.00 level and then all the way back to $94.00 if $97.00 fails.

Otherwise, focus on a potential bounce that may develop now that traders have the rest of the evening to assess whether Apple shares are a buy at this level… or perhaps lower.

Corey Rosenbloom, CMT
Afraid to Trade.com

Follow Corey on Twitter: http://twitter.com/afraidtotrade

Corey’s book The Complete Trading Course (Wiley Finance) is now available along with the newly released Profiting from the Life Cycle of a Stock Trend presentation (also from Wiley).

3 Comments

3 Responses to “Stepping Inside the Rise and Fall of Apple AAPL into 100”

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  2. BP Breaks Down through Open Air into Key Target Level | Afraid to Trade.com Blog Says:

    […] we’ll watch closely to determine whether shares rally up off this support level (see my prior update on Apple AAPL for a similar support-bounce into target opportunity) or else collapse through it into an “Open Air” […]

  3. BP Breaks Down through Open Air into Key Target - Trading Your Own WayTrading Your Own Way Says:

    […] we’ll watch closely to determine whether shares rally up off this support level (see my prior update on Apple AAPL for a similar support-bounce into target opportunity) or else collapse through it into an “Open Air” […]