Calling AAPL's Upside Continuation ... Ahead Of Upside Exhaustion
by Mike Paulenoff
August 15, 2021 • 12:59 PM EDT
On August 3, Mike Paulenoff alerted MPTrader members to the developing setup in AAPL that also would eventually impact the broader market:
Mike wrote: "AAPL continues to levitate within a high level digestion period and pattern off of its ATH at 150 hit on 7/15. All of the action since mid-July certainly resembles a Triangle pattern atop the May-July upleg from 121.68 to 150.00, which we should treat as a Bull Flag type of potential upside continuation pattern that projects next to 153-156, where I will be watching for signs of upside exhaustion. At the moment, only a decline that breaks support at 144.00 down through 142.50 will inflict damage to AAPL's set up-- and compromise the overall market as well. Last is 147.26."
All through this past week, Mike posted follow-up chart analysis and commentary tracking the price behavior of AAPL within its high-level bullish digestion pattern.
On Friday he wrote:
"Today my eyes will be watching the price behavior of AAPL. My pattern work argues that AAPL is emerging from a one month bullish Coil formation that projects to new ATHs above 150 (7/15), and that could extend into the 153 to 156 target zone. However, should such a scenario unfold, my pattern is also warning me that a climb above 150 at a minimum, and possibly to 153-156 will exhibit the 'right look' of a final thrust within the larger upleg from the 3/08/21 pullback low at 116.11. In other words, if AAPL pops from where it is now at 148.90 to 150.01-- +0.6%, and possibly to 153-156, or 4% to 5% higher, I will be looking for a significant downside reversal signal that also will warn us that the major averages are vulnerable to significant weakness as well."
As it turned out, AAPL climbed from 145.50 to 149.44 on Thursday and Friday, emerging from the four-week triangle formation (see Mike's chart below). On Friday APPL closed just under 149.00, positioning itself for upside continuation to eclipse the prior all-time high at 150.00 from July 15, where Mike's work will begin to watch closely for signs of exhaustion and reversal.
Join Mike and our members for "AAPL Watch" next week, with the stock poised to climb as much as 3%-5% to new all-time highs. But will those new highs be sustainable? If not, will the broad market stumble along with AAPL?
Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts on
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More Top Calls From Mike
This past Monday, with Nike (NKE) poised to report earnings later in the week, Mike Paulenoff told MPTrader members that "NKE is vulnerable to a press into the 140-143 target zone either ahead of, or in reaction to, the earnings news."
NKE was trading at 161.75 at the time, and by the week's end the stock was 149.59, having hit a low of 148.
Back on August 18th, nearly two weeks ahead of ZM's (Zoom Video Communications) earnings report, Mike Paulenoff cautioned MPTrader members about the stock.
Mike wrote: "The price structure, which has pressed relentlessly lower (15%) since its 8/05 rally high at 404.35, is probing -- and trading below -- its 100 DMA, now at 345.67, and is considerably beneath its 200 DMA, now down-sloping at 367.20.
In our Top Call article a month ago, we told you about how Mike Paulenoff called AAPL's upside continuation, with the expectation that the stock could extend a little higher before upside exhaustion.
AAPL, indeed, went on to stair-step higher to reach a high of 157.26 high last week, overshooting the upper boundary of Mike's 153-156 projected high-zone by just 0.8%. It then proceeded to initiate the expected bout of weakness that accelerated to the downside this past Friday.
On August 11, Mike Paulenoff alerted MPTrader members to a significant upside reversal signal in AMZN.
Mike wrote that "the 500 point decline is nearing downside exhaustion," noting a preferred downside target zone of 3180-3200.
Fast-forward to August 20, when AMZN pressed to a new multi-month corrective low at 3175.76.
Probably the first price pattern both fundamental and technical investors learn to recognize is a Head and Shoulders Top. Rightly or wrongly, it is the Holy Grail of technical formations, striking fear into holders of the stock, index, ETF, or commodity that exhibits such a technical set up, while eliciting an opposite reaction from put owners and short sellers who anticipate huge gains captured by impending weakness.
