On Wednesday, April 25, Apple gapped sharply higher after releasing bullish earnings news the night before. The stalled at $618.00 after breaking through a retracement zone created by the $644.00 to $555.00 range at $599.50 to $610.00.
The huge one day rise in price increased volatility, but also made the stock relatively expensive, setting it up for a possible retracement of the rally from $555.00 to $618.00. Price and Time analysis suggested the first downside target would be the $603.00 to $599.50 support cluster. This area was reached on Friday, April 27.
The chart suggests that Apple should continue to see selling pressure on Monday, April 30 before it reaches a potential value area. An uptrending Gann angle from $555.00 has identified $587.00 as one target price. Additionally, a 50% correction of the $555.00 to $618.00 range is $586.50. This makes $587.00 to $586.50 an important price cluster on Monday.
Traders who couldn’t buy the bottom and didn’t want to chase the top are likely to begin buying following a test of this support cluster. If the market holds then Apple may form a secondary higher bottom which could lead to another rally and a possible test of the all-time high at $644.00.
If buyers fail to show up on this anticipated break then it looks as if a secondary lower-top has formed at $618.00. This could mean a challenge of $555.00 over the near-term and the possibility of lower prices from there.
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