Currently Apple looks to be in a corrective phase higher as noted by the A-B-C labels.
Trade set up:
I expect to see a 5 wave structured rally to complete the C wave taking the stock into the sell zone identified between 117.18 - 117.45. This sell zone also coincides with the 76.4% fib retracement of the initial move off the recent historical highs.
Looking at an A=C relationship in the correction the correction would be predicted to end near 116.82.
IF the stock reaches these target sell zones, I am looking to short the stock (I will be using options, but for illustration here I will detail using ) with a stop loss at 119.8 (just above the historical highs) with an initial price target of 106.9.
The reason I say initial:
1. I will manage the trade depending on how it develops, if it looks like momentum explodes I will let it run lower.
2. 106.9 is calculated by taking an average entry price of 117.30 and taking away $10.4 (the same length of the recent declines)
Personally I think Apple is about to enter a major sell off as a result of:
1. Profit taking from institutional investors.
2. Recent developments at Apple including problems with Apple Pay in Europe
3. My skepticism over the predicted success of some future apple products ( Apple watch)
4. Over bullishness from analysts on this stock (http://www.marketwatch.com/investing/stock/AAPL/analystestimates)
When I say "over bullishness" I mean that there seems to be a very strong consensus amongst analysts from the link I published above. I believe this could be a sign of crowd psychology acting as opposed to fundamentals. And being a natural contrarian, I will always look (not necessarily act) at the other side when there is such a clear consensus.
At the time of publishing this chart, the results from Analyst recommendations on MarketWatch for this stock were: