2/10/2011

AAPL’s Triangle

AAPL just completed a very nice triangle formation. I think this indicates that AAPL is about to start an extended downtrend. The upside target is 360-361, and could drop to $300 or lower.

021011_aapl_daily

Notice in the chart above the clean triangle pattern that formed in the past few weeks. According to Robert Prechter’s Elliot Wave Theory:

A triangle always occurs in a position prior to the final actionary wave in the pattern of one larger degree, i.e., as wave four in an impulse…

On the basis of our experience with triangles…we propose that often the time at which the boundary lines of a contracting triangle reach an apex coincides with a turning point in the market.

Check out the examples below to see how triangles led to nice reversals.

EUR/USD Before and After:

060610_eurusd_daily 021011_eurusd_daily

NEP Before and After:

010510_NEP_daily   021011_nep_daily

I believe it is time to become cautious with AAPL.

3 comments:

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QUALITY STOCKS UNDER FIVE DOLLARS said...

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