This is the start of a new series, where we’ll show you the hottest stock of the day from Axiory’s new Alpha account! We start with one of the most popular instruments traded on the NYSE … Apple!
Apple has been moving sideways in the past few weeks. This has created two powerful technical patterns, which will most probably significantly influence future movements. Those two patterns are: Head and Shoulders, and a symmetric triangle. And as it often happens, they are present simultaneously. The H&S formation is marked with yellow rectangles and the lower black line is its neckline. On the other hand, both black lines create the symmetric triangle pattern with the price being currently exactly in the middle.
From a price action point of view, there is no signal yet. The way technical traders usually see this is that one can think about going short once the price breaks the lower black line and to go long, once the price breaks the upper black line. It’s that simple.
Trying to predict which direction the price will break can be hard and actually not worth the effort. In this case, breakouts are usually firm and trustworthy, so it is much easier to wait for one instead of trying to guess the direction in advance.