Candle and chart patterns are an important aspect of volume price analysis, but it’s also important to recognize that some have a higher probability of playing out. For example, double and triple tops & bottoms have a high probability of playing out, which we have seen on the Apple weekly chart. First, we had the double top, with the stock subsequently rebounding from the deep valleys at the $168 area. However, as we can see on the weekly chart above, Apple now faces the possibility of a triple-top. This results from Apple’s failure to take out the highs of the double top peaks at $199 and yesterday’s daily close of a bearish engulfing candle in high volume does not bode well for the stock. Interestingly, yesterday’s price action was against the background of Apple’s new announcements at the WWDC24 (Worldwide Developers Conference), where the focus was on AI & the integration with ChatGPT.
Based on comments in my X-feed, the jury seems to be out on whether yesterday’s announcements are enough to restore Apple’s reputation for innovation. The sell-off in the stock price was not encouraging. However, we should also consider the possibility of profit-taking, given Apple’s recovery since mid-April this year and the gap-up earnings rally.
The question now is what next for Apple? Will we see another attempt to break the triple top resistance at $199, or will Apple again mean revert to the $168 valley? Whatever happens, volume will reveal the truth behind the price action.
By Anna Coulling
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