Flipping through charts I pulled up Apple Inc. (NASDAQ:AAPL). To my surprise there was a head and shoulder formation that screamed OMG! For those of you that do not know, head and shoulder pattern formations are extremely bearish, but under one condition. The stock must trade below the neck-line. In the case of Apple Inc. it has yet to trade there, so the pattern has not trigger. However, assuming it does, Apple has downside from its current $110.00 level to $90. And usually these patterns play out very quickly, in a matter of weeks, not months. So let's quickly summarize what needs to happen to trigger this scary pattern on Apple.
1. The stock must trade down below the neck-line. The current neck-line is at $105.00.
2. Once that happens, the flood gates open and Apple flushes within weeks to $90.00.
3. Investors who shorted on the break below $105.00 take profits at $90.00 and enjoy a monster gain while most investors are left dumbfounded as to what the heck just happened.
4. Go buy yourself a steak dinner and maybe a new Ferrari. ;)
View my verified trades here: verifiedinvesting.com/AnnabelleTrader
1. The stock must trade down below the neck-line. The current neck-line is at $105.00.
2. Once that happens, the flood gates open and Apple flushes within weeks to $90.00.
3. Investors who shorted on the break below $105.00 take profits at $90.00 and enjoy a monster gain while most investors are left dumbfounded as to what the heck just happened.
4. Go buy yourself a steak dinner and maybe a new Ferrari. ;)
View my verified trades here: verifiedinvesting.com/AnnabelleTrader