kungfuguo
Long

AAPL 8/20/2013: Reflections

BATS:AAPL   APPLE INC
272 2 0
I use this graph to highlight some of the similarities between first quarter 2012 and the current bullish run.

Take a look at the stock price.
- Back in Feb 2012, we see an 8 day rally, ending with a "bearish engulfing" candlestick pattern (first box). Overall, this bearish engulfing is anything but bearish , as we see a continuation of the bullish channel, all the way to April 2013.
- The starting price of the box was around $450, finishing at around $510.

Now fast forward to Aug 2013.
- We are in a bullish uptrend, similar to that of first quarter 2012.
- We are in a similar 6 day rally, with a bearish engulfing candlestick pattern (right box). And yes, the resemblance (to 2012) is striking. The volumes are similar. Even the resistance and support levels are similar (Rejected around 514 both times)
- Take a look at the RSI . See the similarity?

If history were to teach us of anything, I think we are still in the middle of the bullish trend . I graphed the bullish channel in 2012, and it was cloned and superimposed to the the current run. So far, we are in the middle of the channel. There is no reason to be bearish here. I think we have much more run to run. Let's run with it!

Things to watch for...
- Note that the bearish engulfing pattern in the first box (2012) was a single red candlestick, and did not trigger a downtrend, and certainly did not break down the support of the channel or RSI . By EOD             tomorrow, we will find out whether this is true or not for the current run. If today's sell off was an isolated event (like in the first box), then it would further confirm my thesis.
- Also note the downtrending dotted purple line here. Looking at the big picture, it is a another level of major resistance. It happens to intersect the Sept 10 product release date, right in the middle of the channel. Interesting to see what will happen.

First thing first. Tomorrow is the key here, let's watch it closely.
pdiddy.pablo
3 years ago
In your comparison to 2012 you left out the fact that it came back to 485. I think there is a good possibility of small pull back to 485 this week then back up. Fingers crossed because I'd like to get in at 485.
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kungfuguo
3 years ago
Hi Paul, thanks for the comment. Excellent observation. Indeed, it did gap down to $491 at opening and then went even further down to $485, but recovered well at the end of the day, without triggering further sells thereafter (on 2/16). Interesting though, the large sell off was a single day event (on 2/15), supported by a huge volume. But despite of it, the stock stayed within the channel and kept going up thereafter. As you can imagine, a lot of bears got burned on that day.
We shall see what happens today. A gap down is not necessarily a bearish sign. However, I would like to see that we finish the day green.
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