Apple's Stock Climbs Higher In This Key Pattern: How To Enter The Trade

Apple, Inc AAPL has settled into another bullish flag pattern on the hourly chart. The bull flag pattern is created with a sharp rise higher forming the pole, which is then followed by a consolidation pattern that brings the stock lower between a channel with parallel lines.

• For bearish traders, the "trend is your friend" (until it's not) and the stock may continue downwards within the following channel for a short period of time. Aggressive traders may decide to short the stock at the upper trendline and exit the trade at the lower trendline.
• Bullish traders will want to watch for a break up from the upper descending trendline of the flag formation, on high volume, for an entry. When a stock breaks up from a bull flag pattern, the measured move higher is equal to the length of the pole and should be added to the lowest price within the flag.
• A bull flag is negated when a stock closes a trading day below the lower trendline of the flag pattern, or if the flag falls more than 50% down the length of the pole.

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The Apple Chart: When Apple hit a bottom near the $150 level on March 14 it reversed course and has since risen about 15% higher to reach a high of $172.64 on Wednesday at 12:30 p.m. The stock has since begun to consolidate on the hourly chart.

• The consolidation looks to be setting up another bull flag pattern. So far, Apple has created and broken up bullishly from five hourly bull flag patterns over the past seven trading days and if the stock breaks up from its current flag formation, the measured move is about 3%, which indicates the stock could reach the $177 level near the end of the trading day on Wednesday or early on Thursday.
• It should be noted that Apple has not printed a lower high on the daily chart, which will eventually be needed to confirm the uptrend and may provide a solid entry for bullish traders who are not already in a position.
• Apple has daily resistance above at $174.33 and $177.71 and support below at $171.03 and $167.88.

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