By: Evan Lazarus
I would like to highlight two charts of Apple (AAPL) to analyze the POTENTIAL pattern developing in one time-frame that could lead to the development of another, more powerful pattern on a higher time-frame. I call this a pattern within a pattern.
If you take a look at a short-term chart you can see the ominous head and shoulders reversal pattern developing that could ultimately lead to a clear break of the support line in the near future.
Should that play out, this trade projects a move down to the mid $190s. Active traders should keep a close eye on this trade for today, as the short duration of this pattern will most likely lead to a resolution in the near future.
In chart two, I have highlighted the same stock, with the same potential pattern developing; however, this time, over a much longer time-frame.
In this example, should AAPL trade back to the neckline, that would complete the “head” structure of the much larger H&S pattern. While this pattern will take longer in time to develop (if it does actually develop), it forecasts a much larger potential move down over the coming months ahead.
Charting is like a puzzle in that all time-frames should align and a clear story should always make sense.
