Apple Stock AAPL Can Go Up By 20%

While most of the stocks were down on Monday, there was one stock that was bucking the trend on the news of a potential big deal in the making. Apple is reportedly talking to Comcast about a deal that can improve the picture quality of Apple TV’s set top box. Watch the video below in which the analyst is talking about a wedge pattern being formed on the AAPL charts. Now this wedge pattern means a breakout potential.

AAPL is an uptrend as shown in the video but there is a wedge being formed. According to Ross’ charts, the stock has been trading in a “wedge” pattern since late December, with the lower part coinciding with Apple’s 150-day moving average. A wedge is formed with lower highs and higher lows over a period time, resembling a triangle or wedge.

“What we’re seeing is a contraction of volatility within that wedge formation,” says Ross. “This pattern is not necessarily directional per se but it does tell us that when we get a break from that volatility contraction – an expansion from the pattern – you want to trade in the direction from the break.”

And, with the stock gaining 1% on Monday, that direction is up, according to Ross.

“NASDAQ down 1.5% [Monday and] Apple is one of the few stocks actually higher,” says Ross. “That’s very nice relative strength, which is also a bullish tailwind. You want to be a buyer here on the break from that wedge pattern. I think the stock could trade $600 under the right circumstances.”

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