By using the Elliott Wave Principle (EWP), I found that Apple (NASDAQ:AAPL) shares would top at around $133-138 and should then drop back down over the past few months to $110+/-5 before staging its final rally since its 1997 low. So far, so good as AAPL topped at $137 on earnings two weeks ago and is now trading at $122, 4.7% below its price from my previous update.
As you can see in Figure 1A below, AAPL sits right at its 200-day Simple Moving Average (200-d SMA). I expect it to hold short-term, but not intermediate-term. The green arrows show symmetry breakdown from the $137 high to the 200-d SMA, targeting the ideal $105 level (red “c=a?” arrow).
No guarantee the stock will comply, but it matches. Besides, the 200-d SMA is necessary support and delineates a long-term uptrend (Bull market) vs. a long-term downtrend (Bear market). Meanwhile, the price is below its 10-d, 20-d, and 50-d SMAs, which are now all resistance.
Figure 1. AAPL Daily and Monthly candlestick chart with technical indicators and preferred Elliott Wave count
Figure 1B shows the AAPL since its IPO on a logarithmic scale, and it supports the notion when (black) major wave-4 completes, we should expect one last rally (5?) to new all-time highs (ATHs) completing (pink) Cycle-3 wave.
Cycle-4 should be a multi-year even and easily erase all of AAPL’s gains since late-2018 or even 2016. That would be a ~85% haircut, which, based on AAPL’s history, is not uncommon as it has seen two >80% Bear markets, one >60% crash, three >40%, and one >30% correction. Given Cycle-2 and the one-degree-higher blue Primary-II wave were both ~84% haircuts, it is thus not illogical to assume Cycle-4 could be of the same extend.
Often 4th waves retrace back to the beginning of the prior one-degree-lower 5th wave, in this case, blue Primary-V, which is the December 2018 low at $34, representing an 80% Bear market from my anticipate $150s Cycle-3 high.
AAPL’s share price will have to rally and close back above last Friday’s high, $131, from around current levels to suggest $110+/-5 will not be reached.