Kay Kim | Jan 31, 2016 06:24PM ET
It doesn't always happen, but sometimes (actually more often than we perceived as) H&S pattern can be nullified; if you go back and study the historical charts,
it actually happens quite often. So if the buyers want to see no further selling from this point on, the price must shoot-up to about $112-$115 level for this to work.
Once we get there, pullback will come, and this is where it's very important, when the pullback occurs, the price-action must print intermediate-term "higher-low" thus creating that "right shoulder" on this Inverted Head & Shoulder scenario I've drawn.
If the "right shoulder" has been created, now the Inverted H&S "neckline" must be reclaimed to the upside; and if we can do that by thrusting above the Inverted H&S neckline, I would have to say that's when the Apple has been completely reversed to the upside.
This process could take up to 2-4 months, if, indeed, it's happening this way.
h3 Final Thoughts/h3
Current H&S formation is deadly and dangerous for Apple.
If or when it gets fully confirmed, around $80 is probably where its headed (possibly even lower); especially, with the overall market inflicting extreme-fear upon the investors/traders,
it is not helping this stock. However, I did want to point out, that we are sitting on the last level of support if the buyers decide to make something happen. It's also interesting to note that many of the market-indices are sitting on the last level as well.
Buyers are just barely grasping for air before much more selling occurs for sure; but if the buyers are going to turn things around before we get to the $80, now is the time for the attempt.
/h3
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