The last time I wrote about Apple, Inc. (NASDAQ:AAPL), I correctly surmised that a 4th wave correction (Elliott wave) was occurring.  You can view that post HERE.

I also highlighted a potential buy zone, actually looking for $88 as a good buy level for Apple (AAPL) based on the same measured move corrections from the past. Folks, it never quite got down there and bottomed around 89 and took off.

So the question is:  Where are we now?

As a pattern recognition chartist I trust the PATTERN first and then rely on other technical tactics to build a case for highly probable opportunities from the BUY or SELL side. I just try to find the pattern and release any bias for bulls or bears.

So, trust me, when I ‘see’ a PATTERN that is bearish (in this case 3 drives to a top – monthly) for the worlds most popular stock, I recognize that the hate mail that will ensue!  But here it is… a look at Apple’s stock from an Elliott wave perspective:

  • AAPL setting up a 3 drives to a top pattern 162-170.
    • Note, time isn’t perfect but it’s still symmetrical.  If this works could easily make the case for a pullback to 122-126 MONTHLY gap that is present.
  • Each ‘drive’ was met w/ lower RSI – classic monthly bearish divergence
  • We have a ‘valid’ Elliott Wave count.
    • Wave 2 does not go below Wave 1 – check
    • Wave 3 can’t be the shortest – check
    • Wave 4 cannot go below wave 1 – check
  • Note, each wave UP has been equal to the blue measured moves (second chart) – the first measured move ended as shown and then an expanded flat occurred.

 

Apple Stock (AAPL) Elliott Wave Chart

 

As a power house stock that much of the world owns, Apple (AAPL) will not go gently into the good night.  So, wait for a signal reversal candle as an emerging sign of a correction/topping pattern occurring in AAPL. That level is approximately 149. A weekly close below that level (or monthly if you can wait that long) would be an early indication to get defensive for now.

 

Twitter:  @BartsCharts

Author does not have a position in mentioned securities at the time of publication. Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

 

ALSO READ:  Facebook’s Stock Is About To Head Lower

 

Not Investment Advice – Please read investment disclaimer.