5/02/2008

Could AAPL's run be over?

My recent posts about tech being near a top haven't been too hot. See BIDU here, QQQQ here. Clearly, I have been going against the grain trying to call tops on these issues. I still believe they are near short term (if not not medium term) tops, but I have been early with my predictions.

Now I'll try calling another top. From it's $6.36 low in 2003, AAPL has increased by nearly 3200%, a 32-bagger. I'm going to go out on a limb and speculate that AAPL's run may be nearly over.

The chart above is the 10year chart with Weekly candles. There is a strikingly wave pattern from the $6.36 lows: we are in the 5th wave and final wave up. This fact alone tells me we are near a top.


The daily chart above is what makes me think $180-185 may be the last high we see for a while. The 5th wave seen on the Weekly chart has clearly subdivided into 5-waves. Thus, we are in the 5th of a 5th wave. It is possible for the long term 5th wave to be truncated, i.e. it doesn't break past the Wave3 top. As long as it subdivides into 5-waves, as we see here, truncation is a valid scenario.


The 1hr chart above shows the final evidence that we are closing in the on the top, where we can see the 5th of the 5th wave. The final wave in this run has also subdivided into 5-waves. Thus, to make it more confusing, the 5th of the 5th of the 5th wave is nearing completion.

This probably doesn't make too much sense to too many people. Essentially, since Elliot Waves are fractal, each long term wave breaks down into 5 medium term waves. The medium term waves also break down into 5 short term waves. My conclusion, therefore, is that we are close to a very significant top.

One caveat: the 5th wave on the Weekly chart could end up extending. If that were the case, we would like see a small correction at this point ($30-40), followed by a continuation of the uptrend into new highs. In order for this to happen, the correction from the $180-190 highs would have to occur in 3-waves.

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