A Buy Setup in AAPL

posted in: AAPL | 0

AAPL shares have been in a steep downtrend since early November which has seen the largest company in the world by market capitalization lose 25% of its value (~$180 billion). However, there are some solid technical signs that it may finally be time for investors to step in and buy AAPL:


AAPL (Daily) – Double Bottom


The sell-off following AAPL’s Tuesday afternoon earnings release sent AAPL’s share price down to within a whisker of its August low. Given the bullish reversal candlestick pattern (hammer followed by bullish ‘kicker’) which formed Thursday and Friday traders can now use the double-bottom at ~$92 as a reference point to trade against.

There was also a significant momentum divergence at Thursday’s low which combined with the failed breakdown below $93.50 within the context of a ‘broadening bottom’ chart pattern creates a very bullish recipe for further upside over the coming days:



 Thursday’s low created the 3rd test of the lower trend line of the broadening bottom pattern; the bullish hammer candlestick which formed during Thursday’s session triggered the buy signal. From Bulkowski’s chart pattern site (on broadening bottoms): “When price touches the bottom trendline for the 3rd time and begins rising, buy.”

Upside levels of interest are: $99.99 (open gap from 1/26), ~$101.50 (Friday/Monday’s high), ~$107 (previous support).