What a True Stock Market Winner Looks Like Before the Breakout (Apple 2004)
Just like William O’Neil, Mark Minervini provides countless examples of what we should be hunting for before a breakout and what a true big winner looks like.
Apple in 2004 is a perfect example.
Coming out of the dot-com bust, Apple was reinventing itself with Steve Jobs driving new innovation, which represents the “N” in CAN SLIM. The company launched the iTunes Music Store in 2003, followed by the explosive success of the iPod, and then the iPod Mini in 2004.
Fundamentally, the story was improving quickly. Apple had returned to positive earnings, rising sales, and increasing future estimates, making it a clear turnaround story.
Now look at the chart.
We see explosive volume off the bottom in 2003, followed by the classic structure of higher highs and higher lows as the stock climbed the right side of the base.
Notice the key characteristics:
• Tight pullbacks on light volume
• Volume drying up near the lows
• Heavy accumulation on the advance
• Big volume expanding as the stock approaches new highs
This type of price and volume action signals institutional accumulation.
When Apple finally breaks out to new highs, it provides exactly what great traders are looking for:
A low-risk, high-reward entry into a potential big winner.
