AAPL: Key Support at $185

Recently, it has been a roller coaster type of ride for Apple (AAPL) as it experienced a big sell-off last week going down from its high at $215 to $190.  However, it has made a positive move today with its close at $195 level.  In looking at one year chart, it looks like AAPL is bearish on weekly timeframe.  First of all, let me start by saying $185 level is critical.  If AAPL somehow stays above this level, it will escape the price reversal that it is slowly shaping up to be.  Although the volume is not shown in the chart, there is a clear volume surge last week during its decline, which is not a positive sign for the Bull Market.  So, $185 support level is very important going forward. 

I am also noticed another potential sign of a price reversal.  It’s still too early to tell, but there is a chance that we could see a head and shoulder pattern soon.  The left shoulder is at around $208 and the head at $215.  The only piece missing is the right shoulder.  If this is true, then we could potentially see AAPL going up slightly above $200 level before falling.  If this right shoulder forms in February completing the head and should pattern, then we could see AAPL drop all the way to $155 level, $30 below the base of the head and shoulder ($185).

On another note, Adam Hewison of Market Club has released another video on AAPL titled, “Apple Update: Steve Jobs, the iPad, and King Gillette”.  The most interesting analysis I found by watching this video is regarding the Bearish Engulfing Candle/Line in the monthly chart of AAPL.  Here is the link of his video.

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