We see three cases for AAPL based on the chart above (click to enlarge)…
Best Case: AAPL bottomed with today’s low of 623.55
Middle Case: AAPL will retrace to 650-660, then complete the head & shoulders (gray ovals) measured move which takes the stock to 600.
Worst Case: AAPL will complete the measured move pertaining to the 1-year uptrend. The pink rectangle represents the point at which AAPL was furthest away from the uptrend. The height at that point was 175 (640-465). A 175 point downside move from the 650 uptrend break price would take the stock down to approximately 475.
We think the middle case scenario is most likely, but as you know anything can happen. We are looking for a retracement to 660 in AAPL, at which point we would certainly put on a bearish options strategy.