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AAPL - Buyers Should Limit Bullish Expectations

After the recent slide in AAPL shares, I have been reading a lot of recommendation to buy AAPL despite the company seeing a decline in year-over-year revenue for the first time in 13 years. I think the market has a legitimate reason to bail on AAPL at least partially. But I am on the same page as many analysts who reject the notion that AAPL is now bearish. But my outlook is not that rosy neither. I don't believe we should buy AAPL on the expectation that it is still in a bull market. Instead, I believe we should anticipate a long period of consolidation.


AAPL 5/10 Daily Chart 

(click to enlarge)

In playing consolidation, we are not looking for a bullish breakout. Instead we are trading counter to a bear swing as it approaches critical support. In fact, AAPl is current at a critical support that has held since August 2015 around 92.50. 

From 92-92.50, I think AAPL has upside risk back to 100, or bit higher (to close the gap). However, in the same context, it has downside risk towards 85, where it might meet a rising trendline. 

I think 92-92.50 is a logical place to buy in the short-term. If there is a break below 92.00, we can exit and wait for price to approach 85. I think at 80-85, AAPL is a real bargain. From these depths, the bullish outlook should be limited to 105 in case AAPL is in a bearish correction and not a sideways consolidation. The most aggressive outlook should be capped at around 120, where we see common support and resistance.