Triangle Trade Setting Up in Apple AAPL

Sep 22, 2014: 2:10 PM CST

With all the attention focused on the iPhone 6 this weekend, traders may be missing an iTriangle Pattern forming on the stock chart of Apple (AAPL) shares.

Let’s take a look at the Classic Chart pattern, note the boundaries, and trading tactics we may use as this pattern develops.

Shares continue a strong bullish uptrend as evidenced by higher price highs and higher price lows.

We also observe the most bullish orientation possible in the moving average structure of price in the trend.

Initially, we’ll focus our attention on the confluence of the $100 per share “round number” area with the rising 20 day EMA (today’s low so far).

We can also see that Apple shares have a recent tendency of breaking slightly under the 20 EMA and testing (touching) the rising 50 day EMA.

If this pattern continues, the lower 50 day EMA intersects $98.00 per share (key support).

However, let’s focus our attention for now on the Triangle Price Pattern which sets up a breakout opportunity.

The intraday chart shows the compression (triangle) pattern clearly.

A lower rising trendline intersects the current low near $100.50 per share while the falling upper trendline connects the $102.00 level.

Price has bounced or played ping-pong between these boundaries throughout September (despite the announce – then launch – of new products).

A breakout – bullish trend continuation – trade will trigger above the $102 level (bullish to target above $105).

On the other hand, a range expansion bearish breakdown trade triggers initially under $100.50 but preferably – to be safe – under the key confluence $100 per share level.

The $100 per share level reflects an overlap of the 38.2% Fibonacci Level (as drawn), trendline, and “Round Number” $100 level.

For now, focus your attention on these price levels for short-term trade entry and management strategies.

Afraid to Trade Premium Content and Membership

Follow along with members of the Daily Commentary and Idealized Trades summaries for real-time updates and additional trade planning.

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).

2 Comments

2 Responses to “Triangle Trade Setting Up in Apple AAPL”

  1. Compression Continues as Breakout Beckons in Apple AAPL | Afraid to Trade.com Blog Says:

    […] update our “Triangle Trade” chart from last week and focus on the key trigger-entry levels along with the potential targets to paly for should an […]

  2. Compression Continues as Breakout Beckons in Apple AAPL - Trading Your Own WayTrading Your Own Way Says:

    […] update our “Triangle Trade” chart from last week and focus on the key trigger-entry levels along with the potential targets to paly for should an […]