I know it’s way to early, but after its three-month vertical rise, Apple Inc. (AAPL) is beginning to form a monthly closing price reversal top. Although often identified with major tops, this one should it form, is likely to lead to a 2 to 3 month correction of at least 50 percent of the last rally. There are no indications of a trend change at this time.
Based on the current leg measured as $310.50 to $548.21, a key retracement zone has been identified at $429.89 to $401.72. Standing in the way of a freefall into this retracement zone is a long-term uptrending Gann angle at $458.20 this month.
It may be just profit-taking at this time, but as we approach the end of the month, this pattern will take on added significance.