Is Apple Stock Showing a Bearish Pattern?

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Is Apple (NASDAQ:AAPL) stock exhibiting a bearish pattern? A trader who goes by the StockTwits username of RyKnow recently posted a chart of what he believes is a bearish pattern in Apple stock, MarketWatch reports.  “An unpopular view is that $AAPL is entering/nearing its ‘return to normal’ stage of its cycle,” RyKnow wrote on StockTwits.

RyKnow noted that the bearish pattern can be broken into four broad phases. As seen in RyKnow’s chart, above, from approximately 2001 until 2005, Apple stock was in the “Stealth Phase,” when “Smart Money” dominated. Apple stock then moved into an “Awareness Phase” from around 2006 until 2009, when the stock attracted “Institutional Investors.” Toward the end of 2008, Apple slipped into a “Bear trap,” when investors began to sell off the stock.

After January 2009, the stock began to climb and entered what RyKnow called the “Mania Phase,” which was dominated by “Public” investors. According to RyKnow, Apple’s spectacular climb was fueled by “Media attention” and “Enthusiasm.” By 2012, “Enthusiasm” had devolved into “Greed” and “Delusion.”

The “Mania Phase” ended at the “New Paradigm” peak, when Apple stock went above $700 in September 2012, before subsequently drifting as low as $385.10. In mid-April, Apple slipped into a so-called “Bull trap” before climbing out to its current “Return to ‘normal’” level that it is at now.

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