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Berkshire to the Rescue, or Oversold Bounce for AAPL?


Although my micro work on Apple Inc. (AAPL) argues that the price structure has to claw its way above 94.30 to trigger initial signals that a near-term low has been established, my intermediate-term work is more suggestive that the entire decline from the April 14 high at 112.38 ended at the May 13 low of 89.00, which if accurate, means that AAPL is just starting a potent, recovery-rally period that should climb to close some (all) of the down-gap area left behind in reaction to its April 27 earnings disappointment.

The gap area extends from 98.71 to 103.91.

The absence of downside follow-through upon last week's violation of key support at 93-92, coupled with news that Berkshire established a $1.1 billion, amid an oversold, unconfirmed-low condition, set against a backdrop of Street disparagement of Tim Cook and Company, AAPL certainly appears ripe for a possibly violent, counter-trend rally period.

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