Swing Trading Strategies & Stock Picks Since 2003

For those who are familiar with my previous post on AAPL, I was expecting a rally from what clearly looked like a bullish XABCD pattern formation. Well, it didn't happen. Because the stock really drifted over the last few days, the pattern eventually broke down this morning (why I am not certain, it just popped up on my screen) but the important thing to note is that in the absence of a catalyst, prices broke down. Typically when these patterns break, they tend to break with great force ultimately hitting the 1.272 extension of the C to D leg (that price would be approximately 85.07. The outside target would be 81.25, at the 1.618 extension.

Because trading volume is likely to be light, the patterns may just meander. Either way, lets keep following this one. This will not be the last time these patterns will be followed. Hopefully you will begin to understand how they are established and how they can be exploited.