Chart of AAPL

Apple Inc (AAPL)
** While I was writing this post the AAPL / CHL deal was announced**

• There are many examples of stocks that have peaked, dropped into a valley, and then come back to the old peak and even surpassed it.  Could AAPL be another one of those companies?  It just might be.  Especially with the looming CHL news.  But don't count your apples before they are ripe.  The deal between AAPL & CHL isn't official until it's "officially" announced.

• On this weekly chart of Apple you can see that the old peak was about $700 and now we are at about $550.  You can also see that the high weekly price over the last three weeks has gone lower & lower.  The red downtrend line is your guide if you want to go long.  Once the price crosses above this downtrend line it should be safe to buy again.  If the price breaks the green UT 2 line, then going short would be a consideration.  But let me just say that going short with CHL on the horizon is NOT SMART...

This is a Weekly chart of AAPL

Click here for a larger view of the Weekly chart of AAPL

• The daily chart is more encouraging to me than the weekly.  Why? Because I can see that since the double bottom, AAPL is following UT1.  And since September AAPL has been following UT2, an even steeper uptrend line.  As I have said before, the red downtrend lines represent opportunities to strategically get into AAPL.  If you look at the most recent red downtrend line you will notice that it is fast approaching the green uptrend line I call UT2.  If the price breaks UT2, then look for it to bounce around UT1.  If it breaks the red DT line, look for higher prices.  If the break of the DT line happens in conjunction with a CHL announcement, the price may go much higher.  I would say that the most recent high of $575ish could easily be in the cards in short order (oops!  That was an opinion).  Let's just say that once the red DT line is broken, the $575ish level is the next anticipated level if AAPL is going to continue along the uptrend.
• What are my expectations?  Well considering all the "leaks" of a deal and some great investigative work by the investment community, I would say that a deal is coming.  When?  Soon.  But no one can give a date except AAPL and CHL.  I am long AAPL in anticipation.  This deal could be huge for both companies...  

• If you want to get in, you just have to look for more red downtrend lines along the way.  It is also pretty safe to add to positions once the price surpasses a previous high (peak).  If you really study the chart below you may see places where you can take some profits and wait for a better time to redeploy.  If you have trouble seeing what I am talking about then drop me an email at LinearInvesting@gmail.com.  I am happy to respond (time permitting).  

This is a Daily chart of AAPL

Click here for a larger view of the Daily chart of AAPL

Good luck in your trading / investing.  Trade what you see.  Not what you hope for.  Protect your profits.