Anyone Charting Apple stock momentum and volume from the $389 run up to now?
I learned that in technical analysis, you can track momentum and volume as the price runs up for a certain period of time.
The Rule Is:
When a stock price starts to rise (ie -Apple from $389 to $450) traders jump on the bandwagon and cause the price to move to higher prices at AN EVEN FASTER PACE. Thus the slope of the price move of the stock often steepens causing momentum to increase. If the momentum line starts decreasing but the price keeps going up, that may signal that a trend reversal in price is near. But I believe you have to check the volume too, if volume is decreasing as well then it is a SURE THING that price reversal trend in upon us.
That being said.... are momentum and volume both increasing since Apple was at $389 three weeks ago or are both indicators slowing down? Does anyone know?
becareful with that sort of analysis. The markets have been going up on anemic volume for awhile now - contradicts that lower and lower volume going up marks market tops. The reason being is the explosion of options in trading stocks. People are using options instead, so that makes up some of the low volume seen in stocks these days. In addition, the low volatility in stocks in general means people can put cheap insurance (via puts) and are willing to hold on to their portfolio and not panic and sell at a whim of increase in vols. And of course, the backdrop being the Fed and worldwide central banks supporting stocks. So bottomline, the traditional signals of stocks or markets hitting tops because of lower and lower volume does not really hold these days. It hasn't been for the past year.
Well, that describes me. Go full in, and rachet up the protective puts. I am long 1,600 shares, but my downside exposure is $15,000 if Apple goes to zero. 1,600 shares don't get touched, but I trade protective puts and covered calls every 8 points or so. Doesn't matter up or down.
That sucks. So all the technical indicators I might be using to monitor....On-Balance Volume....Momentum Convergence -Divergence, Moving Average Convergence, Divergence, Cross DMA's....etc. All these are obsolete now?