Apple turns the tide

By Fabio Verdelli
20 April 2009 @ 08:38 am EDT

AAPL – Apple, Inc. – The designer and manufacturer of consumer electronics and software products has seen its shares raising above the main bearish resistance line turning its outlook to bullish. Since December 07 peak at $202.00 we observed a severe decline defined by “Long Tail Down” patterns that after breaking the main support line at $153.00 and reversing the main trend led prices to reach in February 08 the $116.00 level where a solid support was found. The powerful reaction that followed temporarily resumed the uptrend failing to break above the previous top though and bouncing back the $192.00 level developing a bearish pattern of decreasing tops. The penetration to the downside of the main support line at $163.00 reinstated the bearish trend in September 08 opening wide for an unrelenting downtrend. A double bottom in the area $79.00/$80.00 signaled that a turnaround was in place. The 6 months long sideways trading comprised in the range $80.00/$103.00 ended with last month’s “Long Tail Up” pattern which passed through the resistance level at $103.00. The triple top breakout at $110.00 and the violation of the main resistance line at $118.00 reversed officially the trend to the upside. Prices are supported by a positive Relative Strength Vs the market classifying Apple as an outperformer. Due to the overbought condition we are expecting prices to retrace towards the intermediate support line in the next sessions before resuming the uptrend. Hold on for the likely pull back to the $110.00/$112.00 area before opening new longs. Upside targets are set first at $148.00 and then at $161.00. On the downside lighten at double bottom breakout at $102.00 and close all long positions at penetration of the main support line with possible contraction back to the lows at $80.00.

Apple turns the tide

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