If you guys haven't been following the technicals, there's good news for longs in the short term. There was a steep downward trendline that kept rejecting prices lower, but it was finally broken on Friday....to add a little confidence to the move, it came on high volume.
After th price action, a small gap was formed between Thursday’s close and Friday’s open. Look for this gap to fill as the price typically comes down to somewhere in that range. In other words, this gap is a likely area for support. There is a short trendline forming just below and is another likely area for support. A potential play is to enter a trade near those locations with stops set just below. We don’t know how strong the support is at the moment, but we do see another downward trendline that could ruin the day in the near future. I've put up this info with the charts on stockineer, but it's worthwhile to post it here so you guys can also have the same info. Good luck guys and trade wisely!
Hey guys, I hate to say it but AAPL broke below some strong support today. I posted a quick update, but not a new chart. The chart from the 12th shows the support level very well. On the daily chart, you can see the sharp drop that happened right after price broke below $450...this was breaking the trendline. I pointed out the indicators were looking a little sour, but I was hopeful that the support would hold. With the indicators looking even more sour and the support breaking, I would expect to see the price retrace to one of the lower support levels...maybe this will become the right shoulder of the inverse head and shoulders pattern that you can see developing with a neckline at $465??? That, of course, is just speculation. Today, AAPL became a sell, technically speaking. If it rises back above and this move was a whipsaw, it's safe to buy again. Good luck guys, I hope this helps.
I remember that move, broke out (almost) ran to 460+, a month later it traded under 390. Hope we make another big run like that so I can short it again when the institutions start unloading.
So as not to confuse anyone...AAPL did not have a breakout on Friday. The subject line is an old post...but it could breakout on Monday :-)
There is now a potential turn around and a buying opportunity is looming. Price is retesting the former support level turned resistance. However, there’s some positive momentum on the indicators that suggest we may actually see an upward breakout of not only $419, but also the major downtrend line. Still, we must be patient and not jump the gun. I like this setup a little better than simply breaking above a down trendline because there still is no floor…breaking above $419 puts a floor (or at least bulls hope) under the stock. It gives a nice location to set a stop below. The other thing that I thought to be positive is the whipsaw break after earnings. Price shot below the support of $400 only to come whipsawing right back above. I believe this was an attempt to gun the stops and get some cheaper shares before taking it higher.
The rest of the discussion and charts to show this are posted on Stockineer. Bulls aren't out of the woods yet, but getting close. There should still be a proper bottoming pattern before anything really reverses yet, so I've put up another chart showing what could turn into an inverse head and shoulders...that would be the bottoming pattern, or reversal pattern bulls are looking for.
I've posted a new update in which I describe how different traders can trade AAPL...position, swing, buy and hold. Right now we've hit some more resistance which is potentially the neckline of a bottoming pattern...it's a location where a lot of traders will take profits. It looks to be rather strong resistance as it's supported the price several times and has now resisted price for the third time. As a result, this is probably not a great place to add shares if you feel like you've missed the bus. If price breaks high, then by all means add shares, but the chances are that you may be able to save a few bucks if you are patient. I also wasn't a big fan of closing below $450. I wouldn't consider the price falling a little from here negative unless it breaks the key support levels. It will likely need a little breather though...I hope not, just don't panic if it does.
Yes I saw that too. Just barely. I've been watching it. There are two other trend lines to break but they are higher. On the positive, the main trend line that start way back ended a few weeks ago. This is a secondary sell line trend that they broke. But typically, I've seen the price break the line only to turn around and try to get it back beneath it. After the price cannot get back below it, it starts the new upward trend.
I just posted a new update and chart (4/7/3013). It looks like price has retested the low and there was a nice bullish hammer candle posted on Friday. However, I'd wait for the price to break back above the trendline even though the indicators are beginning to look positive again. There's a potential inverse head and shoulders pattern in the works so that would be another buying opportunity, but I'd wait for the price to confirm before trying to pick it off the bottom.
I can help explain. What you probably know is a gap is a jump in price, either higher or lower, from the previous day's close. Technically speaking, it's an emotional day in the market where a lot of people were left behind. For example, if the price jumps up, there were a lot of buyers at that level that are now sitting out because the price is too rich. They didn't go anywhere, just waiting. For prices to move upward, it is better for them to consolidate first...or getting everyone who wants to be in the trade onboard. Most of the stock's life is spent in consolidation, not in trending where the price is actually moving up or down...most of it is sideways. So back to how that relates to gaps...if the price moves up too quickly, not everyone is in so the base is not that strong because the price move up was caused by few investors not large numbers (in most cases). It's just an emotional day where people weren't willing to give up their shares.
The importance of filling the gap, and they don't always fill, but they usually do, is that it is a confirmation that buyers are still there waiting to buy the shares that they missed out on. The price will often retreat to the gap (upper end, lower end, or somewhere in between) before continuing back on its way. This is an excellent place to enter or exit your position, depending on which way you've traded it.
I hope this helps.
Unfortunately, AAPL had a downward breakout this past Thursday. The price is now resting upon a minor upward trend...the same trend that broke through the previous two levels of resistance. I guess I should consider it stronger since it did break those levels, but it's a short term line which is why its strength is suspicious. We're still looking for a bottoming pattern but it's not a good sign dropping so quickly. As usual the updated charts are posted. Good luck guys.