Sunday, March 5, 2017

AAPL Apple Daily Chart; Overbot; Negative Divergence; Upper Band Violation; Price Extended Above MA's

The Apple chart is set up with negative divergence as price makes matching or higher record highs. It is rarely wise to short stocks with momo but AAPL is setting up for a much-needed pull back. In this daily basis, AAPL can likely be shorted at this level and higher. The upper band at 141.28 may receive another touch and as long as the negative divergence (red lines) remain in play, price should roll over to the downside in this daily basis and lose a few percent. Price needs to back kiss the middle standard deviation band which is also the 20-day MA at 135 and rising.

The Apple weekly chart remains long and strong with the MACD line and the RSI open for another high, so on a weekly basis, AAPL will likely come back up for more matching or higher highs say 2 to 5 weeks out. The monthly chart is sick with universal negative divergence hinting that a multi-year top is on the table and likely to print say in April or May. Interestingly, for decades, Warren Buffett said he would never buy tech stocks since he does not understand them but he has doubled his position in AAPL this year and is a huge stockholder in the tech giant. Many  traders worship at Buffett's altar and have followed him into his long-term bullish trade but they may be following him to the gallows.

Price gapped-up after the last earnings release and is now on an island above 127. When price retreats, it may fall back down through the gap from 127 to 122 and lower printing an island reversal pattern. Otherwise, price may simply retreat slowly in the weeks and months ahead and simply fill that gap at 122-127 that is big enough to drive a truck through.

Thus, price should receive a spankdown in the daily time frame after a top this week; say, down for a few days or week or two. Then price will likely recover and print more matching or higher highs, say, as this month ends and April begins with a multi-year top printing, say, in April or May. Come summer and Fall, folks may be knocking on Warren's door asking what to do as price rolls over and may not be back up to the record highs for several years.

So, if adventurous, you can short AAPL for a quickie down trade, but then do not stick around since the weekly chart wants price to come back up again. Watch the weekly chart for the RSI and MACD line to go neggie d and that will be likely be THE top, say in April. Keystone can keep an eye on it and will post the charts as the top develops. Keystone does not have any position in AAPL currently. Do not buy Apple as a long term hold. If you have it as a LTBH and are bragging to your friends about all the money you made, it is likely prudent to begin taking profits scaling out in stages over the next month and stay out for a few months to see what happens. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here. Consult your financial advisor before making any investment decision.

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