As we’ve been examining Elliott Waves recently, here’s a detailed analysis of Apple (AAPL), showing multiple time-frames so you can see the current wave count within the context of the big picture. Courtesy of Corey Rosenbloom, at Afraid to Trade.com. – Ilene 
A Long Term Technical Look at Apple AAPL
What has Apple (AAPL) been up to lately? Not much for long-term investors recently, but let’s take a moment to view the monthly, weekly, and daily charts and apply Elliott Wave combined with Fibonacci analysis to see where we’ve come, how we got there, and what might be in store for the future.
Apple (AAPL) Monthly Chart:
The monthly chart shows a potentially completed full Elliott Wave Impulse from start to finish – it’s extraordinarily rare to see such a chart like this develop at the structure we are now in real time.
Apple began its ascent in 2003 less than $10 per share to end late 2007 at $200 per share, creating massive wealth for shareholders during that period. Unfortunately, the last year has seen shareholder equity lose over 50% in a stock many believed to be inevitable or unshakable.
Take a moment to view the Elliott Count and notice the Fifth Wave was a grossly extended wave that terminated at the $200 per share level. Following that – and despite all the recent price destruction – the correction was an orderly “ABC” corrective phase as described by Elliott Wave Theory.
Notice how the final “C” wave is potentially terminating at the 61.8% large-scale Fibonacci retracement of the entire Elliott Impulse – that is distinctly significant and needs much greater attention. We would expect the $81.50 per share level to hold as long-term support, meaning Apple may be showing a favorable risk/reward relationship now… but if the $80.00 price is broken, then all bullish bets are officially off the table. We may have just hit a turning point in Apple stock.
Let’s zoom to the weekly chart for more insight.
Apple (AAPL) Weekly Chart:
I’ve shown the “ABC” corrective phase closer here. Waves A and B were almost strightline affairs, with nary a correction to enter or manage risk. They were rhythmic, almost syncronatic swings in price that led to the final violent C-Wave decline we’re in currently.
I’ve overlaid two Fibonacci retracement grids off recent price highs (to the $80 price low in November) and would like to note possible confluence areas.
Notice the $140 per share level serves as an important confluence level, which also would reflect resistance via the falling 50 week EMA – this would be a rather extreme target for price to reach short-term (suddenly), but if it broke above $140 per share, all bearish bets would be off the table and we could eventually look for a run up to test the $190 level or beyond – but that’s getting ahead of ourselves.
The more likely confluence target would be the $128 or so level, which corresponds to the 38.2% larger retracement (at $125.63) and $129.48 from the 50.0% retracement of the most recent price swing. Keep an eye on that level as an initial bullish target (should $80 not be taken out any time soon).
Notice also that price would need to break above the falling 20 week EMA to test these levels, so beware of that potential resistance (and price target – magnet) zone.
We have a slight positive momentum divergence setting up from the October lows to the November lows, but it’s minimal as the price swings were quite narrow. The fractal 4th Wave did touch the 38.2% retracement at $117 before falling to new lows – that is a significant development as well.
Finally, let’s step inside the “C Wave” decline to gather short-term insights and potential targets for swing-traders.
Apple (AAPL) Daily Chart:
Keep in mind that the $81.00 per share level corresponds with a large-scale Fibonacci retracement zone, so if this level is broken, all bullishness is off the table.
That being said, price is forming a distinct positive momentum divergence under the action, and we’re challenging the 20 day EMA and perhaps soon to challenge the falling 50 day EMA at $105.00 per share. The falling 50 might be an ultra-shortterm target, while the breaking above the daily 50 EMA would trigger entries from the longer time frame participants/position traders (potentially). Watch this area closely.
I have a little confusion as to how to interpret the current Elliott count, so your opinions are welcome, but the question now becomes “Have we already completed fractal wave 5 at the November 23rd lows… or are we about to begin fractal wave 3 or perhaps 5 back down to complete officially the wave 5 decline?”
What does that mean? We see Waves 1-4 completed rather orderly (and I could have drawn in fractal waves for the 3rd wave) but Wave 5 has already completed (with the slight price lows) or is in the process of forming a final terminal wave down (meaning it has not completed yet).
Until we work off that condition, it might pay to be a little cautious and let price action prove itself over the next few days, but if the impulse is indeed complete, that would signal the potential birth of a new Elliott Impulse in Apple – meaning we’re at the genesis of a potential first wave in a larger impulse (reference the monthly chart above).
I’ll let you conduct your own analysis from here and make your trading decisions, but be aware that the price structure in Apple could get interesting quickly, and if anything, it serves as an excellent educational example of applying the Elliott Wave principle (and Fibonacci) to multiple time frames.
Corey Rosenbloom
Afraid to Trade.com
