This Chart Says The Apple Decline May Be Over

By | November 6, 2018

Last week we wrote here that a head and shoulders pattern had formed on the daily Apple (APPL) chart. At the time, it appeared that Apple shares were breaking down through neckline support.

The daily chart shows Apple shares trading sideways in October, while the Technology Select Sector SPDR saw a sharp decline in its share price. But now what looked like positive horizontal consolidation looks ominously like a potential head and shoulders top, with a complex right shoulder. The neckline of the formation would be situated in the $215 area…

A H&S formation projects a measured downside move by taking the height of the pattern and subtracting it from the neckline. In this case it targeted the $200 dollar area or about $5.00 lower.

Apple saw an intraday low on Friday of $197 forming a hammer candle and closed today at $203.77. It has fulfilled the pattern objective and made a small bounce.

Now some consolidation around its current level would be a healthy process to build a platform for a move higher.

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