Apple Inc. (Ticker: AAPL) has just broken out above a longstanding downtrend line that goes back to Aug. 17 and also lines up with the 50-day moving average.

Tuesday marked two days closing above this trendline.

A general rule of thumb is three days closing over a trendline are needed for it to be sufficiently broken.

AAPL has bounced off the lower support line on my pitchfork:

I believe we have a rounding bottom reversal pattern forming in AAPL.

Coming off that downtrend this formation could be signaling a bottom and a change in trend.

The rules of the rounding bottom formation are few:

• The bottom should take a few weeks and the rally should take as long as the decline took.

• Volume should pick up on the rally and the breakout.

• Like a cup-and-handle formation, the breakout happens when the underlying trades above the high on that left side of the formation.

Here are the levels in AAPL:

It’s possible this formation began right around this level and is ready to break out.

I am thinking the breakout level is closer to $150.

I think AAPL will rally up to $150 from here before pulling back.

Once it does breakout and closes three times over $150, that is when you hop in on the long side.

Remember, this is a long term reverse formation.

Trade accordingly

MSFT Did EXACTLY What I Said It Would

You need to check this out!

On Jan. 17, I analyzed the MSFT chart and said this:

“If MSFT can close above $241, I think it can rally to $255.50, which has been previous resistance. 

From there, the 200-day moving average comes in at $257.40

My long term resistance that goes back to Nov. 2021 comes in at $266.65.

… Right now, MSFT looks to me like it is ready for a minor pullback to gear up for its next leg up.”

Here’s the chart on Jan. 17::

Here is the chart on Jan. 24:

MSFT has just announced earnings and it is currently trading $252.

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Thanks For Reading,

Licia Leslie