Although the stock rebounded sharply from the low of Friday’s selloff, the rally was technically unpersuasive. The implication is that any base-building for a leg to new record highs will likely occur at lower levels. Two problems related to pre-holiday price action stand out on the intraday charts: 1) the low exceeded a ‘D’ Hidden Pivot target; and 2) the rebound failed to surpass any ‘external’ peaks. Together, these factors suggest buyers are more timid than we have seen them in a long while. Despite their lack of gusto, a rally that at least seemed impressive was all but ordained, since there has been no instance in years when AAPL sold off hard for three consecutive days.
Bulls will have a chance to turn the tide with a vengeance on Monday, however, since there are two external peaks not far above to taunt them. The higher lies at 125.17, and if AAPL were to pop above it in the early going, it would make a further move to new all-time highs within 4-6 days no worse than an even-odds bet. I said here earlier the stock would need at least a month to shake off the recent damage, but if it shrugs it off in less than a week, that would be clear evidence that DaBoyz feel no need to even pretend that a little moderation might be a good thing. They are hell-bent on unloading as much stock as they can onto the robinhood crowd and other greater fools, and time could be running out. Better to bamboozle them with an extraordinary display of strength than to allow doubts and rational thinking to creep in. _______ UPDATE (Sep 8, 8:50 p.m. ET): Sellers have breached p=111.65 in after-hours trading, implying AAPL is imminently bound for D=100.79. The stock will have a chance to bounce from p2=106.22, but don’t count too heavily on it to hold. _______ UPDATE (Sep 9, 10:52 p.m.): Bullish would be a pop above C=122.70, wrecking the corrective pattern; bearish would be a decisive penetration of p=111.85, or even worse, a close below it.