Elliott Waves point to Apple stock turnaround

“A few days ago, when Apple (AAPL) reached my technical target around $390, I posted an article suggesting that there was a risk for it to continue lower still should the upcoming earnings report disappoint,” Ramki Ramakrishnan writes for Forbes. “The next target was at $318.”

“As we all know, following the announcement that Apple will issue debt (at attractive rates) and return a load of cash to investors, the stock has quickly recovered some ground,” Ramakrishnan writes. “This article seeks to explain briefly how a trader uses Elliott Waves to change his tactics.”

Ramakrishnan writes, “We always start off with a hypothesis. In this case, my hypothesis was while Apple stayed under $420, the risk was for continued weakness. However, when we notice that a new five-wave pattern on the way up has surpassed the fourth wave on the way down, we recognize it as a powerful signal that the trend is changing.”

Read more in the full article here.

Related article:
Apple share price could go as high as $1,600 within 24-36 months – April 9, 2013

13 Comments

  1. Playing computer games with charts and spreadsheets is the expert’s way of telling us he hasn’t a clue about how the stock market works. Total acadmic hogwash!

    1. There is a psychology of trading that has been captured by these trends. Regardless of whether you like it or not, people believe in them and follow it. If enough people follow it, it becomes reality. The whole idea here is to go with the flow until it turns against you and you make money. You may want to read up on the background of this before you put it down. The market is about greed and fear (emotions) and not about fundamentals.

        1. Of course you are free to use what ever system you like but Elliott Wave software helped me avoid the fall from $700 and has consistently made between 35% to 50% on my money for the last three years.

          1. The U.S. was recovering from an epic economic collapse during that time period. How would your system have worked in 2006-2008? If it continues to be highly successful for a couple of more three year periods, then you might have something.

            Of course, if you have a successful system and others know about it, then more people will start using it, thus undermining its effectiveness. So you really shouldn’t tell everyone how great your system is…just profit from it quietly until you have more money than you will ever need. Then spend it quietly.

            1. The more people who use it, the more amplified the effect. I use a time frame of 2 weeks to 3 months for each trade I set up. The Elliott wave can even be found in day trading time lines but I don’t use it that way.

              More money is made when the stock market falls then when it rises with EW trading.

  2. Wow. This is just in line with my own observation on the correlation between the migratotory patterns of birds and Apple stock. Weeks back, spring was late where I live and birds where nowhere to be found. Then, spring hit fast, snow melted and birds chirped. Apple went up! My only observation is if the swallows don’t come soon, aplple stock is doomed!
    Seriously, this guy qualifies his hypothesis so much it’s basically useless.

  3. A brief study of Elliott Wave theory might offer some readers a chance to both temper their sarcastic commentary and develop a grasp of fundamental technical analysis. The latter would help them profit from cyclical market movements and be more at peace with events they currently perceive as random or conspiratorial.

    1. My point is thatt the theory leaves it to the individual to decide which of a few possible will be the outcome, am i not right? We’re I to guess, I doubt followers of this theory are any more successfull than any other theory. You question my sarcasm, yet if you follow Elliott’s principle you’re using Fibonacci principles to predict stock movements? Seriously? My guess is it works some times, sometimes not. Same as my bird theory. Any performance charts?

    2. Elliott Wave Theory – and their newsletter – is a joke!

      My brother used to forward their newsletter to me, until I started to map their predictions, their “corrected” predictions, the time between their predictions and “corrected” predictions, and their actual success rate of predictions / “corrected” predictions. Once he saw what total gibberish they were spewing, he quit subscribing.

      If you’ve never seen one of their newsletters – they will send out a newsletter before the Market opens. They will explain in mind numbing detail why they think the Market will break this way, or that way. If the Market is going the exact opposite of what they predicted by noon, they’d issue a “corrected” newsletter, again loaded with mind numbing analysis of why what they had said 4 hours earlier was wrong, and why the Market was doing the exact opposite of what they said it would do. Then they’d issue a post-close newsletter now explaining why they were right or wrong. It’s easy to apply your theories in hindsight, it’s much more difficult to apply them in foresight.

      If I had invested as they had suggested, and not simply by gut as I had been, I would have had serious losses, instead of the gains I’ve realized.

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