December 15, 2009
Shares of Apple Inc (NASDAQ: AAPL) have created a pennant formation since reaching new 2009 highs back on October 21.
Pennants are created when rallies reach ever lower highs (October 21 and November 16) and declines reach ever higher lows (November 3 and December 8). By drawing a line through these highs and lows, and extending them out into the future, they eventually connect.
This creates an ever tightening trading range as the declining resistance line and rising support line draw closer together.
Typically, when stock prices break out of a pennant pattern, either to the upside or downside, prices continue in the direction of the break.
A close above $206, or below $189, should indicate near term direction of prices for Apple. And these upper and lower levels are drawing closer every trading day.
Disclosure: The www.fibtimer.com Stock Strategy has a position in Apple Inc.