You would have heard about the disappointing news from Apple. Wonder what Elliott Waves tell us about the extent of possible downmove? Take a look at the chart below. In after hours trading on Monday, the stock was already around $506. There is some mild support around 503, but think the correction of the sell off will probably come from around 497. Later on, though, we will see the decline continue to around 485. You may wonder why I have chosen to label the just completed rally as a C wave and not a 3rd wave. As you probably know (especially if you are a member of the exclusive club), our goal is to make money from the markets using Elliott Waves. Hence, I am flexible with the wave counts. However, take a look at wave B. If that was wave 2, it is a deep correction. So wave 4 should be a shallow correction, finishing near 503 and rallying again. This could still happen, but I doubt it. Too many people have been hurt by this surprise, and in any case, the broader market is looking decidedly cagey. Will investors pile on to snap up Apple stocks at 503? They will do so only if they think this latest earnings report is a one-off bad number. But many people will begin to suspect that the future is more uncertain than what they imagined last week! And that is only going to pressure the stock in the near term.
Apple shares plunge by 8%
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