Don't Ignore This Chart!

Break from "Pennant" Targets $500 for AAPL

Julius de Kempenaer

Julius de Kempenaer

Senior Technical Analyst, StockCharts.com

To get some inspiration for a nice subject or stock to show in this article, I went to my dashboard, on which I have one widget that shows the most actively traded stocks in the Dow Jones Industrials index.

A nice little gimmick is that you can run an RRG for that universe by clicking on the RRG link below the widget. The graph will populate with the stocks listed in the widget. In this case, those were the 10 most actively traded stocks inside $INDU today.

As this list changes every day (and even intraday), I usually switch the RRG to the daily timeframe. And when I did that this morning, there was one, and only one, stock that stood out from all others in a positive way. Apple!!!

The tail on AAPL reversed its rotation back upward about five days ago, following a rotation through weakening and two days inside lagging, and is now pushing hard to move further into the leading quadrant.

When I opened up the price chart for AAPL, I noted an almost perfect pennant from which AAPL is breaking away today.

The stock is consolidating after an almost straight move higher. The consolidation is small and condensed and should not last longer than 3-4 weeks, and volume should diminish during the forming of the pennant.

So far, the current chart of AAPL ticks all those boxes. The only thing that would help, but is not crucial for success, is an increase in volume during and after the break away from the consolidation.

The extra benefit for patterns like flags and pennants is that they allow for easy calculation of potential price targets. You take the height of the "flag pole" and add that distance to the breakout level. When I do that, it gives a target that is well above $ 500...

Whether it is realistic and will be reached remains to be seen, but so far AAPL ticks all the boxes that were described for the first time in 1948 and have stood the test of time ever since.

I'd say that is interesting enough for us to watch at the moment.

#StaySafe, --Julius


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Julius de Kempenaer
Senior Technical Analyst, StockCharts.com
CreatorRelative Rotation Graphs
FounderRRG Research
Host ofSector Spotlight

Please find my handles for social media channels under the Bio below.

Feedback, comments or questions are welcome at Juliusdk@stockcharts.com. I cannot promise to respond to each and every message, but I will certainly read them and, where reasonably possible, use the feedback and comments or answer questions.

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RRG, Relative Rotation Graphs, JdK RS-Ratio, and JdK RS-Momentum are registered trademarks of RRG Research.

Julius de Kempenaer
About the author: is the creator of Relative Rotation Graphs™. This unique method to visualize relative strength within a universe of securities was first launched on Bloomberg professional services terminals in January of 2011 and was released on StockCharts.com in July of 2014. After graduating from the Dutch Royal Military Academy, Julius served in the Dutch Air Force in multiple officer ranks. He retired from the military as a captain in 1990 to enter the financial industry as a portfolio manager for Equity & Law (now part of AXA Investment Managers). Learn More