August 26, 2010
A week ago we wrote that shares of Apple Inc (NASDAQ: AAPL) likely had lower lows ahead because of a bearish Head and shoulders pattern that had developed.
We also wrote: “If shares of Apple close below $245, we would expect that considerably lower lows are ahead. There is initial support at $234.63 and then $224.15.”
On Tuesday, August 24, AAPL closed at $239.93. The Head and Shoulders pattern is complete and pointing much lower.
On Wednesday AAPL reversed from just above support at $234.63 and closed at $242.89. AAPL will likely fill the gap created at the open on Tuesday August 24, and could even reach $253.63. But upside should be limited.
AAPL still has several support levels just below. The 50% retracement support for the March to June advance is at $234.63. The 61.8% retracement support is at $224.15. The 200-day moving average is at $231.26 and rising.
These various support levels could stop the declines but it is more likely that AAPL has considerably lower lows ahead, possibly a test of the February lows at $190 a share in coming weeks.
The Fibtimer.com (http://www.fibtimer.com) Stock Timing Strategy does not currently hold a position in Apple Inc.
Disclosure: The Fibtimer.com (www.fibtimer.com) Stock Timing Strategy does not currently hold a position in Apple Inc.