The reason I’m showing you this stock is because it has the highest market cap of any stock in the world I believe. Not to long ago I read something to the affect that it could be the first stock to have a trillion dollar market cap. It remained me of the late 90′s when I read that. Tech stocks were going ballistic to the upside even stocks that had no earnings to speak of.
Below is a daily chart of Apple Computer that I haven’t shown in awhile. This stock shows up in alot of the stock market indexes and plays a big roll in how they move both up and down. Notice the head portion of the bigger H&S top formation. That is a small H&S top that reversed the parabolic run. It doesn’t look like much but it was significant in turning Apple around from up to down. Many times you will see a small H&S top that is just part of a bigger H&S pattern further down the road.
The weekly look really puts the H&S top into perspective. Note the black uptrend rail off the 2009 bottom and how the price went parabolic starting at the end of 2011. The price basically doubled in 6 to 8 months which is an unsustainable run. What makes this H&S top pattern a little more ominous looking is that the right shoulder couldn’t make it up to the neckline symmetry rail and fell way short. If one of the best companies in the world is topping out what does that say about the rest of the stocks going forward? It maybe suggesting that this cyclical bull market, that has been in progress since the 2009 crash bottom, maybe coming to an end and the secular bear market might be getting underway again. One stock does not make a market but one of the best companies in the world, showing a topping pattern, could be a strong signal to protect your 401 K if its possible.