Volatility & FANTAG Stock Patterns
In 2017, Apple continued its “Super Cycle” mode as it rose 46.11%. Similar to Netflix, AAPL is also trading in a five-wave bullish pattern with an embedded ABC Bullish pattern (see “Patterns Within Patterns,” Modern Trader, May 2017). An ABC Bullish pattern (monthly) has been in the works since May 2016 with an entry above $111. The first target range is $138 to $152 and the second target range is $190 to $218. In 2018, AAPL did see a significant correction in January and February, but recovered to make its 2018 high in March and come within $10 of its second ABC Bullish pattern target of $190.
Online advertising giant Alphabet (GOOGL) has seen excellent growth since Google’s initial public offering at $50 in 2004. It has consistently rallied to a high of $1,186 in 2018. However, it has been recently stuck in the crosshairs of Facebook’s privacy issues and mishandling of public data.
Google has seen a 1.64% correction so far in a volatile 2018. In April 2017, GOOG was trading in a rectangle channel pattern. GOOGL traded above the rectangle channel upper trend line in October 2017 to trigger a breakout trade with a target of $1,059. After completion of the previous channel, GOOGL is currently trading in another rectangle channel between $992 and $1,186. Watch the channel boundaries for potential trade opportunities.
The influx of volatility in the first quarter of 2018 was long overdue and inevitable. For bulls, it has brought some high flying technology stocks back into play, and for bears, it may produce technical shorting opportunities. Keep an eye on the above-mentioned patterns for the possibility of two-way trades.