Eiffel tower patterns can be painful to an asset!!!
Last November, when Apple was trading over $600 per share, the Power of the Pattern reflected that Apple could be in the early stages of an Eiffel Tower pattern. (see post here)
The 4-pack below reflects Eiffel tower patterns in a variety of assets over the past 15 years. Notice that the right side of the tower looks very much like the left side, just in the opposite direction. Also notice that on the right side of the pattern, “counter trend rallies do take place” in an overall downtrend!
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The key to this 4-pack above.…each of these assets fell so much in price that they returned to where the pattern began on the left side. In other words the entire rally disappeared!
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It has paid to buy Apple on support line (1), since it traded at $100 per share. Yesterday Apple hit line (1) for the first time since 2011. Should Apple find this line as support? It has for the last $400 per share!
So which is more powerful, the support line or the Eiffel tower pattern? As you can see in the 4-pack above, assets do have counter trend rallies on the right side of Eiffel tower patterns! One has to expect Apple to do the same every once in a while.
What Apple does with the falling resistance line around $550 per share will end up being very key in the battle between rising support line (1) and the Eiffel tower pattern!
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