Apple (AAPL) stock will fall to $80 or less in the next few months, according to comprehensive technical analysis.
That prediction is based on the same set of analytical tools that yielded this Oct. 2 forecast that Apple shares would rise to the $120 area after hitting an August low of $92.00. The same day that forecast was published, the stock closed at $109. By the end of November, the stock reached the target level and began to roll back down. In that analysis, the decision support engine's algorithms showed that after the stock tested $120, the shares would go even lower than the August low and would target $75 +/-$5, with an increasing probability of $60 +/-5. The following monthly bar chart shows the updated price behavior, but there's no change to the forecast. $80 remains the highest level the stock must test in order to complete the entire correction off the stock's peak near $133, with further bearish potential to the $60 zone.
The only difference between the current forecast and the Oct. 2 one is that the path toward $80 now has an intervening relief bounce, from current levels to around $110. Otherwise, the objective conclusion is to continue to avoid Apple shares until the decision support engine yields its next buy signal on the stock.
The timing for such a signal is at least several weeks to months away, as can be estimated by the still-crashing stochastics. Stochastics reached the same overbought extremes around last year's high and around the 2012 high. In both cases, the stock's price was making higher highs while stochastics were making lower highs, creating a bearish divergence sell signal. Both instances are highlighted by the bold blue lines pointing in opposite directions in the top and bottom panes. This condition is a warning that the decision support engine always searches for. It's as bearish at a top as it is bullish at a major low. With this major sell signal in force, the crashing stochastics must be given wide berth to continue to their oversold extreme condition, which will be seen once the 10% threshold is tested. Again, that is likely still weeks to months in the future.