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Nexvu on Economics, Politics and the Markets

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Apple – Love/Hate

Posted by nexvucapital on January 25, 2013

AAPL has gone from most loved to most hated (the extreme pessimism we look for) and as we learn in psychology 101 (come on we all took it) there is a thin line between love and hate. Consequently, when something bad happens, it’s easy to trash an icon or vilify a hero. AAPL has gone from icon to villain in just a few short months as the intensity of the “love” was unsustainable (overbought). It is now firmly in the unloved bin so lets take a look. RSI is headed to oversold, MACD is in oversold and STO is embedded in oversold. The question then becomes where to catch the falling knife? It appears that a classic five wave correction is in progress and we are seeing what appears to be the final impulse wave (#5). The previous resistance below this price is at $425. These are never hard targets but they provide guidelines. In the case of AAPL we have yesterday’s gap down that could provide an interesting up on the turnaround back to the $500 level where there should be some serious resistance to any rebound as the stock price will run into a pack of jilted lovers who tried to save their relationship with AAPL but it was already too late.

AAPL - Weekly January 25 2013

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