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Apple Shows Signs Of Key Break Down



May 16, 2011 – Comments (2)

Apple Inc. (NASDAQ:AAPL) has been stuck in purgatory for weeks now, trading sideways to lower. It did not matter if the markets were sharply higher or lower, Apple continued to trade flat to lower. This pattern for many is known as bullish consolidation but the price action was unbelievably poor. The leader of the technology sector was no more! This was a direct alert that the bullish pattern may fail. As of Friday, May 13th, the pattern failed with a close below two major moving averages. These moving averages had been the support level for the bullish consolidation pattern. With a close below, the downside may come fast and furiously. A possible drop to the 200 moving average at $320.00 is likely in the next month. Always remember, a failed pattern in one direction usually results in a major move in the opposite direction.

Another stock worth noting is, Inc. (NASDAQ:AMZN). Amazon looks to have finally put in a pivot top on Friday at high of $206.39. This high will confirm today as a pivot top if the closing price on the stock ends lower than the lows on Friday. That looks likely at this point. would become a short on any solid bounce back towards that pivot top.

Gareth Soloway

2 Comments – Post Your Own

#1) On May 16, 2011 at 12:48 PM, Milligram46 (< 20) wrote:

Seriously, SERIOUSLY?  The stock moves sideways for a couple of months and everyone is ready to declare the ride is over?!?!

Go over to the MSFT board, you'll still find cheerleaders there saying after 11 YEARS of going no where that the stock is bound to go up.

Pigs get fat, hogs get slaughtered, the velocity that AAPL stock has enjoyed has been near dot comish, is the ride over, bah, look at P/E and growth - hardly. The scary thing is AAPL is very fairly valued, maybe even under valued compared to other companies.

There is growth to go.

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#2) On May 16, 2011 at 1:51 PM, ikkyu2 (98.17) wrote:

Since you are interested in technical factors, it would have behooved you to mention the Nasdaq rebalancing that occurred over the last several weeks, forcing large indexed funds like QQQQ to sell millions of AAPL shares.

That is, if you knew about it. 

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