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Caution warranted in AAPL?

|Includes: Apple Inc. (AAPL)
AAPL has been a key pace-setter for this rally since the bottom in March of 2009.  While I have been skeptical of the sustainability of their margins, their growth, and their all-around perfection, the market has continued to bid them higher.

I remain skeptical that they will continue to meet the lofty objectives that the pundits have set for them in the next five years.  I may or may not be wrong in my big-picture cynicism on AAPL as a stock.  But for the moment, I believe the chart is providing reasons for caution.

On the three year chart, AAPL appears to have formed a pretty clear rising wedge.  The upper line can be drawn a couple different places, but what is unmistakable is that AAPL has now broken its trendline support from 2009 bottom.

 

For the moment, the resulting action has been sideways.  Not so bad.  The stock may be working on a downward channel though, as AAPL has been unable to break to the upside of its current channel.

Both QQQQ and S&P have failed to clear their downward channel resistance in the last three days.  Only time will tell whether AAPL and the major indexes are setting up for a bigger fall.