Apple has been making its ascent from the mid $90’s over the last couple of months, with the last couple of weeks showing increasing acceleration in the ascent. In this article, I want to focus on any potential chart patterns for Apple on its chart.

The Apple trade I’ve been writing about continues its ascension upwards, at least for the short-term. With the woes from the Galaxy 7 Note and its cease of production, there is no better time to look for another earnings and revenue beat from this technology giant. What is Apple going to do with all that cash? Increase the stock buyback? Increase the quarterly dividend? They may save that announcement for a subsequent quarter when an earnings and revenue beat are not as significant. These next 2 quarterly reports for Apple should be outstanding though.

Let’s see how Apple’s chart is setting up and if it has any identifiable chart patterns or trading opportunities.

Apple – AAPL

This first chart for Apple (AAPL) is a 5 year weekly candlestick chart. I’ve outline 2 different potential basing patterns. The black trendlines represent a Cup with Handle chart pattern while the blue trendlines represent a Double Bottom chart pattern.

If you haven’t seen my revised basic chart pattern page, take a quick peek before you continue analyzing AAPL’s chart. I talk about the 2 different chart patterns on that page. I also list some general guidelines for the patterns.

Based on the guidelines I list on the basic chart patterns page, I think the above pattern looks more like a Double Bottom chart pattern than the Cup with Handle chart pattern. Regardless, I think either pattern offers an opportunity to still cash in on some nice gains for AAPL’s share price.

AAPL – Trendlines

This next chart is a 4 year weekly chart. I wanted to capture AAPL’s entire run-up before its correction in the chart view.

Pullbacks to the medium-term trendline are the area to scale into shares for those looking to go long if you haven’t already. That area is around the $110 – $111 mark. I’ve identified the medium-term trendline with the black arrow. On any purchases made, I would look to lock in some profits around the previous high area then.

As a general rule, the first attempt at a previous high usually doesn’t succeed in breaking through for a breakout. If it does, it is usually short-lived. There are too many investors that got trapped at the previous high area and are looking to just sell their shares once they get back to break-even. Selling some shares at that level and looking to repurchase them on a low volume pullback could present one of the lower risk and better trading opportunities in the market.

The other thing that I really want to focus on before looking at another chart is the symmetry of AAPL’s uptrend and correction over this 4 year period. That 4 year period looks to represent a complete 8 wave cycle from an Elliott Wave perspective. Apple appears to in the beginning stages of its next 8 wave cycle.

AAPL – Fibonacci Price Targets

The previous high is a good area to fade this AAPL trade, but it might take a little time to get there. Regardless of when it does, you should lick some profits in.

This next 2 year weekly chart has a Fibonacci Extension Tool placed on AAPL’s first uptrend and pullback that did not undercut the beginning of the uptrend. Since AAPL’s share price has advanced through the 161.8% Target Line, the 261.8% Target Line is probably the next major area of resistance. That makes a lot of sense to me, right around the $125-$125 area, a nice round number.

The top of the 161.8% Target Line should act as a support level during any pullback for AAPL’s share price. That is right around the $111 area, the pullback area I’ve previously written about for AAPL an article or two ago.

Apple – Summary

In summary, AAPL’s share price appears poised to re-test its all-time high. On its way, I would say it is ok to buy the dips and try to continue trading AAPL to the upside until it nears previous highs. When it reaches previous all-time highs though, it would probably be a good idea to fade the trade (start scaling out of some shares) and wait to see if a handle or low volume pullback develops on the chart. The formation of the handle itself may even take a couple to several weeks to finish shaking out the sellers.

In the short-term leading up to the potential re-test of the new high, I do see a trade opportunity to sell some shares around the $122 – $125 area and then look to repurchase those around today’s share price of $117ish. I will be looking to trade that possible scenario with about 30% of my shares. I don’t want to trim much more than that in case I get caught out of position on the run-up to the new high.