This week's chart will feature AAPL
As usual we will go back to show you where it has come from and what key levels they held first, then bring you up to date.
We start with the 3/23/20 low (1).This was 61.8% back to the 2019 low and 38.2% back to the 2008 low.We get two things to look for from these retracements, first is the 61.8% rule says that by holding 61.8% we should look for 61.8% back from where they just came from, this would be 71.50 and secondly, the 38.2% rule says they should go for new highs to keep the trend intact. The rally from 53.15 (1) took them up to 61.8% at 71.50. As always we watch all the retracements on any setback and this one was only able to 38.2% back at 66.70 (2) keeping the rally intact and that we should again look for new highs.
The ensuing rally up to new highs had a few more minor setbacks, so we had to tighten up the retracements and use previous lows. On the chart (3) was 38.2% back to the (2) low and (4) was 38.2% back to the (3). The low on 7/24/20 (5) was 23.6% back to the 3/23/20 low (1). The move up from there took it to the all-time high of 137.98.
The break from the all-time high went down to 38.2% (A) of the 3/23/20 low. By holding 38.2% we should be looking for new highs, but will watch all the retracements back up. The first move up hit 38.2% back to the all-time high, but could only go 38.2% of that rally keeping the trend positive. The next move went up to 61.8% (B) back to the all-time high. Even though the bigger picture is still saying to look for new highs as long as the 9/21/20 low (A) holds, you can look for a break from 61.8% to be 61.8% the other way. This happened on 10/28/20, but hit 38.2% of the break the next day, which said to look for more downside. They hit 78.6% of the move on 11/2/20 (C) and like the 61.8% rule, the 78.6% rule says to look for 78.6% of where they just came from. This was hit on 11/9/20 (D).
As long as they continue to stay above 38.2% (A) back to the 3/23/20 low we look for new all-time highs. They are currently caught in a trading range above 38.2%, so on a rally look for 78.6% at 130.00 to set the market back before new highs. With a couple solid closes below 105.80 (A) look for the next major support level at 85.50, this will be 38.2% back to the all-time low and 61.8% back to the 2020 low.