Elliott Wave analysis of Apple stock (Nasdaq AAPL) was posted in WaveTimes on 5th October, when we paid our tribute to the late Steeve Jobs. I remembered that post when I saw some rumors that Apple was asking for its production of iPads to be slowed down. The charts that you see here seems to vindicate the belief that there is considerable value in using Elliott Wave Principle for our investment and trading decisions. Take a look. 
In the first chart, you will see the point ‘a’ is where we posted our previous analysis. At that time, we suggested that Wave III was already over, and we should expect wave IV to be a complex wave, meaning we will not go down directly, but there is a chance for a corrective pattern which will take us higher again. Sure enough, we were presented with an irregular B wave that went slightly higher than the top of wave III.
Could one have anticipated where the top of the irregular wave B will finish? Sure! Using the techniques that I have taught in the book “Five Waves to Financial Freedom” you could have identified a resistance very close to the actual top. This is illustrated in the second chart of Apple that you see here.
In addition, the chart shows you that when wave C of the complex correction started down, you could have used a 50% pull back (wave 2 of the big C wave) to initiate some fresh shorts. I am also giving you potential targets for the end of Wave IV. 
How confident can we be that it will work out again? Well, I have often maintained that in addition to solid analysis, you need to have sound money management techniques. I have said that we will probably not go above 390 now. So if you wish to have a low risk trade, you will probably wait for the fourth wave of the current C to take us slightly up and then sell. However, as always, you need to have a stop, because there are no guarantees in the market. We have a method that has worked over and over again. However, we also realize that one has to change tracks the moment something goes wrong. Elliott Wave analysis gives us a terrific edge in achieveing low-risk entry points and also identifying possible direction as well as extent of an impending move. What more can we ask for! In case you still have doubts, go back to the book and read the relevant sections. Good luck.
7 Comments
Mr. Ramki,
I believe Apple may already have completed 5 waves or in an extended 5th wave. If you go all the way to 1997 you can notice that the 2000 .com crash created wave 2. the 2008/2009 subprime crash created wave 4 and is possibly in an extended wave 5 as shown in my attached chart.
http://chart.ly/rp42xgr
regards,
-Srinivasan.
Hi Srini, Thanks for your comment. There are always many ways of counting a move, and we will not know which one is the right count until after the move. My preference, at the moment, is we are in a complex 4th wave.
Dear Mr.Ramki.
We are watching parabloic rise to almost 500 for aapl.
How long this can continue or is this typical extneded 5 th to be corrected sharply to 380
Hello Sir
Apple has surely Topped yesterday(15th Feb) for the short term it seems, it has made a Bearish engulfing Pattern(A Bearish Reversal Bar with 4 times the Avg Volume) and the Rise from 365-400 has also been on Lower Volumes. Plz update Your view.Thanks
Regards
Sachin
Mr. Ramki,
I recently bought your eBook and am reading through it. Good work. I am brand new to Elliot Waves. I was drawn to Elliot Waves and thereafter to your book after reading your EW analysis of Apple (AAPL). About two months ago, I thought I understood your analysis, but now I seem lost. Where do you think AAPL is now? It seems to be going up almost every day. Your valuable, educated input on this would be appreciated.
Thanks and best regards,
Sam.
How does the wave theory explain Apple now trading above 460?
Joe, I have posted another update on AAPL in Forbes today. Will publish the link tomorrow.