With Black Friday at hand, what better article to write about than the retail giant of the technology industry. Apple (AAPL) has been under pressure lately like other large cap technology stocks like Facebook, Alphabet & Netflix, all part of the FANG group.

But with the holiday season ride high hopes for Apple investors. There is a link about Apple selling refurbished iPhones that I posted in the Idea Chamber under Apple’s topic. Even though these phones are selling at a cheaper price, the margins on these phones should be great.

Another holiday bonus this year for Apple is Samsung’s disaster with their batteries. This will be the quarter that reflects all those lost sales on Samsung’s side and gains on Apple’s side. Apple needs to impress investors with those gains this quarter. If it does not, even with good or great sales, the share price could start to stall. At that point, Apple executives would have to announce a buyback or increase the dividend to attract investors again.

One of the gaffes that Apple has going for it this holiday season is not having their wireless EarPods ready to sell. This would be a perfect add-on gift for someone who is giving one of the new iPhone 7’s as a gift. While they will probably sell quite a few when they are finally released, they are missing an important holiday season in my opinion.

With all this Apple news, it should make for an exciting quarter and earnings report in January 2017. Let’s review a couple of the possibilities for AAPL’s share price from now until then. After reaching the lower of my pullback range around the $104 area, it is best to re-analyze Apple’s charts to determine that the uptrend is not only in place but getting ready to start another leg upwards.

Apple’s Bullish Impulse Wave Pattern

After the pullback from the $117 area back to the $104 area, I have to look at the chart from an Elliott Wave perspective again. That pullback tells me that the $117 area was probably the top of a Bullish Impulse Wave Pattern. Let’s look at a chart and see if the push down to the $104 area represents the entire correction or just part of it.

Analyzing Apple’s Daily Chart Using Price Gaps, a Fibonacci Retracement Tool and Elliott Wave Analysis

From a time perspective, AAPL’s correction would appear to need more time to finish. In the above scenario, AAPL’s share price pushes up to the $118.69 area, the high from the preceding uptrend, and fails to break above it. If this scenario unfolds, expect one more trip to the $105 area before a new uptrend begins. That new uptrend should begin prior to its next earnings report in January 2017.

The above pattern would be a standard Zig-Zag wave pattern. Wave A of the Zig-Zag wave pattern was the push down to the $104.08 mark. Apple would currently be in Wave B of the Zig-Zag wave pattern. It should see resistance at the $115 area.

If I start to see resistance in the next couple of weeks as AAPL’s share price tries to push through the $115 area, I may sell a few shares in anticipation of a pullback below my sales price. However, buying momentum is gaining daily as seen by the MACD Histogram the last several days. The trade might even be to sell shares one day and maybe buy them back the next day.

If buying momentum keeps increasing as AAPL’s share price reaches overhead resistance, there is a good chance it can negate the resistance by “closing the window” or “closing the gap”. I would still anticipate a pullback even if the window is closed, but a closed window is no longer resistance for the next trip upwards and the pullback should be relatively shallow.

Apple (AAPL) – Cup Pattern Continues

This chart is a 5 year weekly candlestick chart. With the aid of trendlines, a Fibonacci Retracement and a Fibonacci Extension Tool, I was trying to figure out a more bullish path for Apple’s share price leading up to its next earnings report. This next char tis one of the more bullish scenarios I came up with for AAPL’s share price.

For this bullish scenario to play out, I would anticipate nice buying volume next week along with the MACD Histogram turning back to buying momentum rather than the selling momentum keep increasing.

Analyzing Apple’s 5 Year Weekly Chart Using Trendlines & a Fibonacci Extension Tool

Look for AAPL to continue building the right side of a large cup like pattern over the next several weeks. If the $124 area is reached within the next 2 weeks and the above bullish scenario seems to be playing out, I will sell 1/3 of my shares at the $124 level and look to repurchase the sold shares on the next pullback before AAPL reports earnings. A repurchase zone would be the $115 – $118 area. If this bullish scenario does not play out as anticipated, I will most likely continue holding my entire position until earnings.

Apple (AAPL) – Golden Cross

Looking at Apple (AAPL) from a moving average perspective, it developed a Golden Cross pattern in the not too distant past.

Analyzing the price activity for Apple (AAPL) after the development of a Golden Cross pattern

I have pointed out on some other charts where the first pullback below the 200 Day moving average after the development of a Golden Cross pattern is an excellent opportunity to go long. This is especially true for value investors with a medium to longer-term horizon.

Apple’s first movement towards the 200 Day moving average resulted in a nice bounce. Is there a way that AAPL’s share price can still break below the 200 Day moving average to create that value investing opportunity? Yes, there is. It would start by AAPL’s share price not breaking above $118.69, which was the high during the previous uptrend. Most likely, it would see resistance around the $115 area due to the Falling Window candlestick pattern’s resistance area.

Break Below the 200 Day Moving Average?

For Apple to have a break below the 200 Day moving average, AAPL’s share price should push up to but not above the $118.69 mark and then start to pullback again. If that does happen, AAPL could be setting up for a quick re-test of the $104.08 bottom. Refer to the first illustration above regarding a possible Zig-Zag wave pattern – this wave pattern would push AAPL’s share price below the 200 Day moving average for a brief period.

Apple (AAPL) – Summary

Based on all of the analysis above, the general consensus from all the different technical analysis methods seem to indicate that buying shares on any move below $106 should have support close below and indicates a great value over the short to medium term.

During the current uptrend and before earnings, if the $115 overhead resistance area is broken then continue holding out for at least the $124 area before scaling out of some shares. However if the $115 area proves to be too stiff of resistance in the short-term consider a small sale like I will be considering, maybe a 1/3 sale of my AAPL position with anticipation of repurchasing those shares back around the $111 mark or lower.

Holiday sales for Apple (AAPL) should be great and possibly even deliver some new records. But will those records be great enough for investors? I will trade my shares as mentioned above leading up to earnings but plan on being fully invested again before its earnings report in January. I think that the quarter will help AAPL continue building the right side of its Cup pattern and move back towards its previous all-time high.

While one of the more bearish scenarios is possible for Apple, I would think that it would be a temporary blemish on its chart and nothing to worry about for its medium to longer-term outlook.