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Wednesday, May 15, 2013

Apple: reversal ?


The analysis

It seems the long-term downtrend in AAPL could have ended and we may be seeing the beginning of a new uptrend here. That would be confirmed by AAPL holding its low around 385$ and, more important, making a new high above 470$. But the jackass in me has already jumped in at 427$.

Price action shows AAPL breaking its major downtrend line on March 18th, and retesting it successfully while making a new low around 385$, near the 50% Fibonacci retracement from the highs. My support stands between 420 and 430 (my exact support was around 427$ which is where I entered the trade). A negative here it that, while the prices are playing around the MM50 days, the MM50 stands well below the MM200 days which keeps falling.

In addition, the weekly stochastics have gone out of the oversold zone and rising, which is a sign of strength, while the daily stochastics are falling quickly and approaching the oversold zone. Finally, Relative Strength VS S&P500 (indicator labelled "RS (APPLE INC.)" on the weekly) is still showing strength.

All in all, a rather speculative bet, until new high is reached while preserving the previous low.

Bearish warning : a correction in global markets can happen anytime now. And the longer it takes to correct, the more violent that correction is likely to be.

On the fundamental side, I'm bearish Apple, as I've been saying for a while on this blog : Apple watch your back, Android is coming for you;)

The charts


AAPL weekly end of the downtrend? successfully retested previous downtrend line around 50% Fibo retracement, stochastics out of oversold zone, Relative Strength VS S&P500 still bullish
AAPL weekly end of the downtrend? successfully retested previous downtrend line around 50% Fibo retracement, stochastics out of oversold zone, Relative Strength VS S&P500 still bullish

AAPL daily, MM50 below MM200 and stochastics still falling but quickly reaching oversold zone
AAPL daily, MM50 below MM200 and stochastics still falling but quickly reaching oversold zone

28 comments:

  1. WolfStreetInDaPitMay 17, 2013 at 1:06 PM

    Just in case you've missed this, thought that was "funny" (ironically speaking that is) : "The most-shorted stocks are outperforming the S&P500". So thanks bears for helping propell that nonsense ever higher.

    Meanwhile, my little French oil company (that I shouldn't have initiated weren't I such a jackass) is doing ok.. Break even so far (except for the commission fee). "Well see".

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  2. WolfPitStillInDaStreetMay 17, 2013 at 1:09 PM

    "little French oil company SHORT" that is

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  3. AAPL not doing that fine right now... still above 430 though.

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  4. Bullish close. Monday is gonna hurt a little here in France... Meanwhile AAPL underperformed... Shitty weekend.

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  5. Interesting interview of BR at Yahoo : Ritholtz: “Give the Market the Benefit of the Doubt”.

    Despite mentioning some possible "seasonal weakness", he says professionals are still underinvested and will eventually get "forced in". Additionally, he says it's not too late for investors who've missed the rally. Read "investors" as opposed to "traders".

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  6. VolatileWolfStreetMay 20, 2013 at 12:00 PM

    Apple largely overperforming the S&P500 today. Meanwhile my little short underperformed, closing in the red. I already love this new week.

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  7. AAPL is not for the fainthearted... BTW, got stopped out of my short. Next step, what I should have done to begin with: wait for a pullback to get long. The trend is up. No short. Period.

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  8. HelicopterWolfStreetMay 22, 2013 at 12:51 PM

    What the market wants is for Bernanke to say basically nothing. Let the party go on then...

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  9. Dude... markets do fall... sometimes...

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  10. Is THIS (barely more than 3% from the high) what we used to call a "correction"? Meanwhile added some French longs, as my place was on fire for the most part of today's session. "Well see"

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  11. K... stepping aside from trading and blogging for "some time". I don't feel too comfortable being long in that market. Note that the S&P500 formed a "reversal day" pattern on Wednesday, which adds to that ominous feeling.

    So I've just sold my longs with pocket change profit, and will sell AAPL at the open.

    Have fun...

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  12. Couldn't help myself but bought some longs yesterday and this morning. I'm playing the consolidation aka trading range here, with the S&P500 oscillating between 1635 and 1700. Guess we can work the overbought condition out by moving sideways.

    I may sell near the previous high below 1690. Depends on how it behaves when (/if) we get there.

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  13. Meanwhile, seems I'm definitely the last blogger standing.:`(

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  14. I'm going to sit here and wait... till someone comes by.

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  15. K.. erased that last post. Sorry was too depressing. xD

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  16. Just sold my longs with a slight loss, as I don't want to be long over the week-end. Now I'll be a good boy and wait for that pullback to get back aboard. I believe now is too risky, too much downside potential with little upside left.

    Trade safe.

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  17. Seems I'm not the only one who doesn't want to be long into the weekend...

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  18. 1600's could be a good entry point. But somewhere around the 1580 level would be even better, considering how over-extended those markets have gone. See you there.

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  19. WolfStreetDippingSomeToeJune 6, 2013 at 10:44 AM

    There she goes again. Bought ATVI yesterday. May add a French long position if we get to the 1580 line.

    BTW, AAPL taking a beating today. That isn't quite the bullish reversal I was expecting. I'm long out of it though.

    Trade safe.

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  20. WolfStreetStillInDaPitJune 7, 2013 at 3:52 AM

    I'll consider the correction to be over if the S&P500 gets back over 1625. I'll play that bullish scenario through a long position in a French company linked to oil. Have fun.

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  21. WolfPitInDaStreetJune 7, 2013 at 10:38 AM

    Autocongratulating myself : good call so far:D "Well see".

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  22. And!!!........ that was my last comment here, until someone comes by. I may or may not hold my longs later on, well see. Was fun knowing you anyway.:D

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  23. Ah and, of course, may you all be well and at peace.

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    Do you require any html coding expertise to make your own blog?

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    ReplyDelete
  25. The exit is this way ===>

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  26. See ? SP500 @ 1800 ++ man we were so wrong in the good ol' times.:(

    As for me, I've got my new home @ http://www.andlil.com/forum/

    Some people living from their trading over there. And some jackass like me still losing, but getting closer to flat !

    Cheers friends. Hope everyone is doing fine.

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