We have been monitoring Apple Inc. stock (symbol AAPL) with special interest since about 2013, when it began to appear that share price might be tracing a topping pattern. Even as share price rallied to reach an all-time high in early 2015, it had formed a five-wave impulsive structure that we thought would precede a decline.

Approaching AAPL from a bearish view, we now attempt to identify the resistance areas and timing that will mark a series of lower highs as price moves downward in the first phase of a big corrective pattern.

The monthly chart below shows a projection for the first leg [a] of what we expect to be a larger correction. Typically the first leg of a correction consists of three sub-waves, which we would label (a)-(b)-(c). The extreme dip in price during August 2015 appears to have been the first of those, or sub-wave (a) of [a]. In the time since then, there has been a lot of overlap, leading us to count the price action since August 2015 as a corrective sub-wave (b) of [a].

Now we are watching for price to find resistance and begin declining in sub-wave (c) of [a]. The broken channel boundary presents an attractive area for that resistance to manifest, and it could coincide with a Fibonacci-based measurement near 122. However, there are also potential resistance targets as low as 115, so a test of the channel line is not guaranteed.

You can also view a more detailed weekly chart at our website that shows additional levels to watch based on measurements among sub-sub-waves ‘a’ and ‘b’.

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While we expect AAPL to begin declining sometime in the next few months, we also believe the decline will accelerate if price breaks beneath the trend line that connects the lows of 2009 and 2013. Our eventual target for sub-wave (c) of [a] is the area from 64 to 72. In later years, another leg of the correction could take price even lower, but it is still too early to project that move.

With equities markets becoming more volatile, our next email bulletin will focus on U.S. stock indices. Request your copy at our website.