Saying 2013 has been rough for Apple (AAPL) is the understatement of the year. The tech behemoth has seen its share price drop by around 20% since the first trading day in January -- that's about $100 billion in value for anyone keeping score. And all along the way, everyone has been wondering when (or whether) the selloff would take a break. Well, it looks like the reprieve could come sooner rather than later.
That's because Apple is forming an inverse head and shoulders pattern, a price setup that indicates exhaustion among sellers. It's formed by two swing lows that bottom out around the same level (the shoulders), separated by a lower low called the head; the buy signal comes on the breakout above the pattern's "neckline" level, which is right at $460 right now. That puts this stock's upside target right around $535.Don't make the mistake of being early on this trade. There's still a glut of selling pressure above the $460 level, and it's shoved Apple lower each time it's been tested. Wait for the neckline to get taken out before putting your neck on the line on this trade. The 50-day moving averageis a solid place to keep a protective stop once the breakout happens.
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