Update on AAPL: Dec 23, 2013

AAPL’s rally from 385 likely represents a backtest of the broken red channel within the larger white channel.  It recently reached our target [see: Aug 19 Update] on Dec 5, a little behind schedule.

The white Bat Pattern completion seems to suggest sell the China Mobile news, while the potential for AAPL to reach the yellow .618 argues otherwise.  The rising white channel nested within the top 25% of the larger white channel also suggests a reversal here at the yellow .618 or white .886.

As noted in August, AAPL failed to extend further than the .618 Fib level many times on the way down from 705.  Could this be another terminal .618 tag?

Whether this is the final thrust or the precursor to a Gartley Pattern completion at 636 remains to be seen.  But, without a new high here, we could easily see a backtest of the broken falling purple channel at a typical .618 retrace (of the rise from 385) at around 460ish.  Even a mild .500 retrace indicates 480.

Bottom line, the breakout of the falling purple is undeniably bullish.  Though I remain constructive on the stock, we could get a 15% correction before it advances any further.

Good luck to all.

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