There’s no doubt that Apple Investors are both disappointed and frustrated that their favorite stock hasn’t realized its full price potential after kick-ass earnings back in October. That frustration was compounded last week with an unusual downgrade from Needham analyst Charlie Wolf.

Mr Wolf downgraded AAPL to a Buy from a Strong Buy for what he called “valuation reasons.” He sheepishly explained that it was “admittedly arbitrary” criteria for the lower valuation. He snow-flaked this lame-ass move by saying the recession made him do it.  Didn’t he get the memo that Apple is recession proof. What further evidence does he need? Makes you wonder if they believe their target of $235 and first quarter EPS prediction of $1.77. Cautious, yet optimistic. Just like an analysts, fear of committal.

Well, all of this is just foolish fodder, because AAPL is setting up for a near-term bullish advance. And this analysis has nothing to do with the economy or fundamentals, it has everything to do with technicals, and the indicators are in favorable alignment.

AAPL is currently at the bottom of its uptrend, which provides pretty good support by itself, but it’s also developing a lateral base from the gap-up it created at earnings time and the strong advance it had November 9th. Let’s add to that the hollow candle it sported on Friday, and the very favorable oversold conditions on the near-term charts, and you have the makings for a nice near-term pop in price.

A good trade might look like this:

Best Entry: $199.50 to 200.50
Target: $210
Stop: $195