The Apple AAPL Arc of August 11

I wanted to call your attention to an ‘arc’ formation that is completing in Apple (AAPL) stock at the fresh 2009 highs.  Let’s take a look.

As price has swung powerfully from July’s $135 lows to August’s (so far) $165 highs, price seems to be taking a pause in a normal/natural retracement ‘topping’ arc formation that has also formed a clean negative momentum divergence.

Notice the numerous dojis (which reflect indecision) as price completes the visible arc, which can be reflective of a gentle transition from buyers to sellers (or of demand giving way to supply).

We’d have to see price break beneath $160 per share to expect a deeper pullback/retracement to test the rising 50 day EMA at $150, so keep your eye on that level to see how price reacts as the downswing/pullback continues.

For now, Apple remains in a convincing rising uptrend structure, though if price were to break beneath the solid 50 day EMA, that would be perhaps a first sign that the trend was weakening, which could bring in additional selling.

Were the arc to complete fully, it would forecast a ‘mirror image’ retracement back to the $135 level which would reflect price support.  Until then, let’s monitor the action for additional clues.

Corey Rosenbloom, CMT
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