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    Today’s Trading Edge: Apple shares consolidate after new product announcements

    WWM_AAPL_MAR_21_2016.jpg

    Apple Inc. (AAPL) delivered a new 4-inch iPhone, a smaller iPad Pro, and a lowered the price for Apple Watch. The key focus fell on the launching of the iPhone SE, the company announced a $399 price, lower than many analyst expectations of $450. The new iPhone SE will have the A9 chip, providing faster LTE speeds. The company reported sales over 30 million of the iPhone 4” phones in 2015, most of which were new customers. Presale for the new phone will take place on March 24th and shipping will occur on March 31st.

    The new iPad Pro will have a smaller screen option of 9.7” and a price point starting at $599. The Apple Watch price was cut from $349 to $299.

    Price action on the Apple daily chart show that the initial spike higher triggered a potential bearish butterfly pattern and the respect of the 100-day SMA. Point D is targeted with the 161.8% Fibonacci expansion level of the X to A leg and the 261.8% Fibonacci expansion level of the B to C move. If valid, we could see price pullback towards the 50-day SMA. Further downward momentum could eventually finds support from the 100-day SMA and the psychological century mark.

    If the pattern is invalidate, we could see price target the $110 region. Longer-term resistance remains the $120 level.

    The Trade: Buy AAPL shares at $103.40, with a stop loss of $99.40 and take profit of $115.40. The risk/reward ratio is 1:3   


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