Five Star Stock Watch: Apple, Inc.

The company: Apple, Inc.

Ticker Symbol: AAPL

Sector: Consumer Goods   

Industry: Electronic Equipment

Apple Inc. and its wholly-owned subsidiaries design, manufacture, and market mobile communication and media devices, personal computers, and portable digital music players worldwide. It also sells software, services, peripherals, networking solutions, and third-party digital content and applications related to its products.

The company offers iPhone, a line of smartphones that comprise a phone, music player, and Internet device; iPad, a line of multi-purpose tablets based on Apple’s iOS Multi-Touch operating system; Mac, a line of desktop and portable personal computers; and iPod, a line of portable digital music and media players, such as iPod touch, iPod nano, iPod shuffle, and iPod classic. It also provides Apple TV, the iOS and OS X operating systems, iCloud, and manufactures the Apple LED Cinema Display and Thunderbolt Display.

Please take a look at the 1-year chart of AAPL (Apple, Inc.) below with my added notations:

Notice the rising wedge I have outlined on the chart of Apple. A rising wedge price pattern is essentially a type of triangle formation in which the stock (Apple) has formed an up trending resistance line and an up-trending support level (blue). These two trend lines converging on one another combine to form a rising wedge, which is usually a terminal pattern (bearish).

Confirmation of this pattern would occur if the stock broke the up-trending support.  The declining momentum that I have highlighted in the lower panel (red) seems to support the idea that AAPL's run may be coming to an end.

Apple isn't set to release earnings again until January 23, 2014.

No matter what your strategy, or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!