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Objective Analysis of Apple Inc: There Isn't an App for That
Elliott Wave Junctures uses relative strength index range rules to determine whether AAPL's freefall is finally over.

By Nico Isaac
Fri, 01 Feb 2013 17:30:00 ET
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Yes, dear readers, the marketing slogan is true. There is an iPhone app for that which you never imagined. Next time you're waiting in line just to go in your local Apple store, you can pass the hours with these downloadable digital diversions:  

Bake a virtual cake, groom and raise a virtual horse, perform virtual plastic surgery on a virtual nose, protect your home from virtual zombies, pop virtual pimples, converse with a virtual girlfriend, and press a "Hold On!" icon whereupon a timer counts how long you can keep your finger on a button.
 
And since we've already "gone there," my all-time favorite game app is called "Enviro-Bear" -- wherein a crazed grizzly hotwires a stick-shift and drives maniacally into a wooded forest. He proceeds to ram his car into trees, over bushes, and through rivers, all in an effort to dislodge and displace as many birds, nuts, and salmon from their homes -- & then into his mouth -- before time runs out on the "hibernation" clock.
 
And of course, iPhone users can always turn the game off if the action gets too intense.
 
Investors in Apple Inc., however, have not been so lucky. Over the past few months a real-life Enviro-Bear has crashed the price charts of Apple Inc.'s stock (AAPL). Since setting an all-time high in Sept. 2012, AAPL has plunged 36% to its lowest level in a year.
 
Also, Apple's latest earnings report showed profits fell flat at $13 billion -- the first time in years the tech giant did not record double-digit growth. Which begs the question: Has the bear finally gorged himself on enough 'apples' to go gently into hibernation?
 
According to the mainstream experts, the answer is yes. And, it's also no. Here, we have the recent pair of conflicting headlines below:
 
"Apple May Be Past Its Prime" (The Economist)
- vs. -
"Don't Let Apple's Stock Slump Scare You" (Slate)
 
There is a third opinion: Elliott Wave International actually anticipated Apple's 2012 reversal of fortune. Here, we go back to where it all began.
 
In late March, early April 2012, app-timism had reached a boiling point. "Apple Fever Prompts Prediction of $1,000 a Share," read one Businessweek headline from the time. "We don't see ceilings to our opportunities," added one Apple executive.
 
But, according to our April 2012 Asian-Pacific Financial Forecast, "The ceiling for AAPL's rally of the past three years lies just ahead."  Asian-Pacific Financial Forecast went on to paint this fuller, bearish picture:
 
"When Apple Inc. falls back below [the upper line of its trendchannel], it will confirm the start of a correction... The 42-week rhythm indicates a possible turning point around the second week of April."
 
On April 10, AAPL turned down in a violent, six-week long and 18% deep sell off before reclaiming the upside.
 
Then in the weeks leading up to AAPL's Sept. 19, 2012 peak, our Sept. Asian-Pacific Financial Forecast warned of a bearish comeback and wrote: "Our forecast for the stock this spring served its purpose. The next big move should be down."
 
The 30%-plus freefall since then speaks for itself.
 
So, back to the original question: Is the bear finished gorging on "apples"? Well, the tech giant has a rare, lead role in the Jan. 25 Elliott Wave Junctures video episode "What RSI Rules Say About Apple Inc." There, EWI's esteemed senior analyst Jeffrey Kennedy walks subscribers through an absorbing lesson on Relative Strength Index range rules as applied to several real-world price charts.
 
The chart de-resistance is of AAPL, reprinted below, from which Jeffrey reveals whether recent falling prices constitute a counter-trend move within a larger uptrending market.
 
 
 
 
Get instant access to Jeffrey Kennedy's' Jan. 25 episode via an Elliott Wave Junctures subscription today.

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