someone asked me about resistence point for aapl, whether at $250 or not on the silicon investors forum...
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(my reply)
as a technician, i use fibonacci projections for longer term moves.
back in jan of 2006, aapl made a high of 86.40, then move to a low of 50.16 in july of that year. if you take this down leg and apply fibo ratios to it, you get:
61.8% of down leg gets 1.618 x (86.4-50.16) or 58.636 pts
so, 50.16+58.636 is 108.796
aapl moved to a high og 97.80 in jan of 2007 from that 50.16 low in 2006 pretty much without any major 15% correction.
it didn't get close to the 61.8% fibo extension point, but i'll take that.
now we had recently a 42.05 pts or 21.8% correction in the 4th qtr (192.68-150.63), really a 2 weeks market swoon...
if you take the same 61.8% fibo extension:
you get 1.618*42.05 or 68.04 pts
so the 1st resistence will be at 150.63+68.04 or 218.67
how valid is this $218.67 ?
let's ask the institutional traders at the cbot!
jan aapl options are pricing in a range of 182.18 to 217.48 until january 19, 2008. that 217.48 option implied target as priced by traders is very close to the fibo extension target.
over the years, this method i used for resistence discovery is as accurate as any i have seen. as always, trade with discipline and always take profits when you have them.
paul
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