This article will focus on calculating reversal areas using Fibonacci tools. I will use a variety of Fibonacci charting tools to calculate potential support and reversal areas in case of a continued market pullback. I look at long-term charts for Apple (AAPL), Facebook (FB) and Tesla (TSLA) in this article.
Hopefully by now you have reduced your long exposure to stocks. I have suggested taking some profits off the table since the last week of September. If you have done so like me, then this article will have some nice price targets to put on your “stock wish list”.
For those that haven’t taken any profits off the table, the price targets I calculate for Apple and Facebook are a little scary.
Some of the price targets for stocks in this article may seem ridiculously low. Let other investors overpay for what may seem like a “great deal”. Use the pullback areas identified in this article to start a scale-in entry process. TSC members should stop by the Idea Chamber for an update before making any purchases.
Apple (AAPL)
This first chart for Apple (AAPL) is a 10 year monthly candlestick chart. There are a couple of long-term trendlines along with a Fibonacci Retracement Tool placed on the chart.
Considering that AAPL’s share price has almost performed a 38.2% retracement already, I would look for a minimum of a 61.8% retracement on this pullback. That would put AAPL’s share price back around the $144 price range.
Analyzing a 10 Year Monthly Candlestick Chart for Apple (AAPL) Using Trendlines and a Fibonacci Retracement Tool
If I am right about the NASDAQ possibly pushing to the 5,100 level, I think the support for AAPL might be found a little lower than the 61.8% retracement.
The bottom green trendline is the longest trendline of the 3 trendlines on the chart. AAPL’s share price would be looking at the $125 price level on a pullback to the longest-term trendline. I think the $125 price target[s2If !current_user_can(access_s2member_level1)]……
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I calculate reversal areas for Apple (AAPL) and Facebook (FB). And rather than a reversal area, I calculate an upside breakout price level for Tesla (TSLA).
If you are not a Trendy Stock Charts member, consider joining today! There are several different subscription plans available.[/s2If][s2If current_user_can(access_s2member_level1)] could be a very good possibility because the MACD Histogram is still showing buying momentum, even though it is decreasing, and AAPL’s share price has already dropped more than 20%. What is going to happen once the MACD Histogram starts to show selling momentum?
Facebook (FB)
This next chart is a 10 year monthly candlestick chart for Facebook (FB). A Fibonacci Extension Tool was placed on FB’s downtrend to calculate where the downtrend may end. Just like any uptrend, I am looking for the “Golden Ratio” for the downtrend. That would be the 161.8% Target Line. That calculates to a $104 price target for FB’s share price.
Look for the Golden Ratio of Facebook’s (FB) Downtrend to be Reached; the Golden Ratio is the 161.8% Target Line
The Golden Ratio for FB’s downtrend also coincides with the bottom area of Wave 2 in its Wave 5 Extended Wave.
At the beginning of FB’s downtrend its MACD Histogram had a spike of selling volume to start the downtrend. Four months later we are looking at FB’s lowest prices yet.
This set-up seems eerily similar to what the NASDAQ is doing right now. It is starting with its first spike of selling volume. Four months from now I think we will be talking about the lowest prices yet for the NASDAQ.
Tesla (TSLA)
This last chart is a 10 year monthly candlestick chart for Tesla (TSLA). I was quite surprised to find a bullish looking chart in the middle of a market correction.
As mentioned above for Facebook, there is a Golden Ratio for uptrends and downtrends. The long-term Golden Ratio for TSLA’s uptrend calculates to $574. At a minimum, TSLA’s share price appears poised to move towards the $450 price level.
Analyzing a 10 Year Monthly Candlestick Chart for Tesla (TSLA) Using Several Different Fibonacci Extension Tools Looking for Confluence Areas
TSLA’s MACD Histogram is showing decreasing selling momentum now for 2 months and also has had increased buying volume over the last 2 years.
If TSLA suffers with any general market weakness and pulls back in price, consider going long TSLA shares around the $280 price level. TSLA’s share price current sits right below a $350 resistance area over the last couple of years. A break of the $350 area in heavy buying volume is an indicator that the breakout is on.
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