We never enter a long trade unless we have an expectation of making 35%, but shorts are another story. Being able to identify and take short term trades of 10-20% on shorts is enough to get us interested.
AAPL had been hitting steady lower tops and bottoms for months and its Magnet® score had deteriorated as well. All our chart signals called for yet another wave down and at the time of this trade we were also just entering the “Worst Six Months” period” according to our time tested Almanac strategy.
At $405 APPL still looked like it could go lower but it was approaching the bottom of its short term trading envelope. That is when the alert went off and it reminded us why we set targets.
The point of this post is simply to remind you that setting price targets is important when putting on trades. While AAPL ranks out poorly, there are several lower ranked stocks at this time. We continue to feel comfortable putting on short trades even as this market continues to grind higher. We have several short trades in place at this time in addition to our net long portfolio.
Click image to view larger size…
Jordan L. Kimmel is the Managing Member & Portfolio Manager of Magnet AE Management LLC and Jeffrey A. Hirsch is the Chief Market Strategist and a limited partner in the Magnet AE Fund, LP. Magnet® is a registered trademark of Jordan Kimmel.