AAPL - Path to $75 Reaction Price Zone Cycle LowAAPL is one of the equities I’m watching closely to start turning on strategic dollar cost average for multi-year LONG positions.
I’ll update this idea as the story of the chart unfolds.
Highlights:
Multiple TA indicators from my trade system show 70-80 as the potential target for the current SHORT momentum move.
On the way there, multiple signals show 100-110 area being significant key psychological handle (100) with multiple high probable reaction zones. RDA, anchored vWap, key level in Value Channel.
The Daily chart is bias and momentum short with the recent momentum check reacting as we expect. The D chart is only helpful in a key level right around 104—which aligns with multiple areas covered in this idea.
Fundamental view: I’m interested in AAPL because I believe this entity will play a role in the next cycle of technology. Those areas of tech are VR, AR, AI, Robotics, and the merge of humans to technology. For this to happen, AAPL has to release 2-3 new product categories in the next 3 years. I believe the first to drop will be in the AR/VR market. Also, they must refresh the phone category in the next 3 years, I feel there needs to be a major leap in either functionality or design architecture.
Let’s get right to it and cover the highest probability reaction areas and interesting TA insight:
Anchored vWAP (green lines)
First up, as I write this, the ticker is reaching an anchored vWAP from a significant low of March 2020 short momentum move. At a minimum, I’d expect an upside reaction or a weak range to develop. That doesn’t appear to be happening yet.
The next significant low anchored vWAP comes from December 2018; this aligns with the 100 handle (right now around 104.00).
If the reaction doesn’t happen around the 120 handle I’d expect a multi-week LONG reaction from the area around 100-110.
The one the story of the chart tells me in play is the anchored vWAP comes from the low of 2016 – this is aligning right around $75. Remember this price as it will play a role in what I cover next.
Significant Value Channels
There are 3 significant value channels:
Recent Large VC
The first is the big one. The low: 2018 SHORT momentum move level. The High: ATH level defined in 1Q 2022. Here’s where a few things align:
The 50% of this channel is right around 109. This aligns almost perfectly with MONTHLY RDA (RexDog Average) and close to the anchored vWAP of 104 mentioned above. The other important level from this VC is right around 72. Remember this zone.
Inflection Value Channels
The next 2 value channels aren’t what we consider high-value areas but based on the story of the chart, are significant inflection areas that we expect reactions if price does enter those zones.
The first, 80-94 with a center price of about 86. The second, 57-80 with a mid-price of around 70 or so.
How do you TA this? Take the significant levels of both inflection points—69 to 87, making 78 the key area of reaction we’d expect from these two zones. So 78 area a key area.
Another key level that is clear is the high level created in JAN to FEB 2020 of 82.50 or so. If this area is tested we’d expect an overshoot of the level to the downside. Well within the percentage range of alignment of things I’ve already covered above.
My trade system reveals that AAPL is on a path to hit the $75-70 price area. Around this area is where I’d look to turn on daily purchases likely twice a day.
Here is a synopsis of those alignments (all outlined on chart):
2 inflection VCs key level: 78.
D key level from 2020: 82.50, if test, overshoot to below to 75 or so.
Overall VC key level at 72.
2016 aVWAP aligning at 75
Monthly top inflection level at: 76
As you can see there are quite a few RexDog Trade System probability areas aligning in this 70-80 range.
Path to Getting There
It’s not going to be an easy path. What is clear the 100-110 area is ripe for an upside, possibly multi-week LONG counter BIAS move. Those who trade or have adopted my system know exactly what to look for and the areas of reaction. It’s the momentum indicators and the RexDog Average Bias indicator.
It’s that simple really, the Daily and 4D chart provide these key indicators and levels. Don’t complicate something that is simple.
Possible Change of Outlook
This is simple as well. If the Daily chart flips momentum from SHORT to LONG, pay attention. If price recaptures and stays above the RDA around 140, pay attention. If price does make a run to these levels using the 60m chart for clues if it’s going to fail or hold will be key.
Also, I'm willing to miss the trade if the 100 handle area holds. If multi days close below the 100 handle then the 70-80 seems the likely area of cycle low.
