Apple Price Bounce Right on Cue!
April 29, 2013
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I get the question all the time, “How do I know your EBV lines work?”. Experienced model price users know they work but first time users do find it hard to believe that our pre existing Economic Book Value (EBV) lines do form price support and resistance on our model price charts.
I have seen stock prices bounce off of support EBV lines so often over the last decade that either I have lost the excitement or I have become too mechanical in my own thought process to appreciate the eloquence of the math, which our EBV lines represent. For me weekends and quiet time can be spent looking at model price charts and a review of the past week. So when I came upon the model price chart of Apple Inc. I simply had to stare and marvel.
Have a look at the model price chart of Apple Inc. as of Friday, April 26, 2013.
Apple Inc. with weekly price bars, EBV Lines (colored lines) and model price (dashed line)
For those interested, a daily updated chart of AAPL subsequent to this post will be maintained on Facebook, here.
Also I have included a Bloomberg chart showing intraday action from April 18 to April 22, 2013. Notice on Friday, April 19th, Apple traded down to a low of $385.10 with a significant intraday rally during the day. This is Apple’s stock price hitting EBV+4 with a subsequent rally from our calculated EBV+4 price support level.
Intraday Price Charts of Apple Inc. from April 18th to April 22, 2013
Yes, it’s hard to believe. This happens all the time!
Millions of traders, billions of dollars are coming together trading Apple shares on a daily basis. However the internal laws of nature, where we derive our mathematical constants that form the basis of our EBV lines, provide a structure where share prices can and do fluctuate consistent with predetermined support and resistance of our calculated EBV lines.