Tuesday, February 21, 2012

AAPL Apple Daily Chart Rising Wedge Negative Divergence

AAPL price is now up for a matching high compared to three days ago and the indicators are negatively diverged. The price action takes on the red rising wedge profile which is also bearish. Price can move up into the 520's which appears as an attractive short entry, but shorting momo stocks like this is highly dangerous. The weekly chart, however, still has considerable momo and strength so it will want to see price come back up again after a sell off.

Note how the 444 level and higher has now formed an island top so when price comes down it will either collapse thru the gap to create an island reversal, or simply come down to fill the gap at 430-444. The coming days may develop into a wild ride for AAPL; over the next day or two, the Apple appears to want to fall from the tree now receiving a spank down from the negative divergence.

This is important since AAPL has single-handedly helped support the broad markets. If AAPL sells off, the broad markets will as well. This information is for educational and entertainment purposes only. Do not invest based on anything you read or view here or any links connected to this information. Consult your financial advisor before making any investment decision.
Posted by at

2 comments:

  1. ArnieFebruary 21, 2012 at 10:08 PM

    i noted the same kinda pattern for most markets; with higher prices but lower ssto, lower macd, etc. Also, DJT (Dow jones Transportation average) has been lagging for the last few weeks, which is considered a leading indicator. Given -as you noted KS- that the TECH sector -despite AAPL's "come back"- isn't leading either (at least for the last 2 days), I am "afraid" this is all becoming very toppy. Note that I think we'll have a 1-3 week pullback at the most to probably low 1300s for the SPX, say ~1320, and then the up trend will continue. I know markets can be pushed up beyond what anybody thinks is normal -simply due to liquidity- but even that may have it's short term limits.

    ReplyDelete
  2. Keystone SpeculatorFebruary 22, 2012 at 9:09 AM

    Hello Arnie, yep, higher price sloping up from peak to peak, while indicators are sloping lower for the same period is negative divergence and signals a smack down is typically on tap.

    Trannies are important in relation to the Dow Industrials due to Dow Theory, they must always confirm each other to show the rally is real, but, as seen lately, trannies stumble lower while Dow is moving higher, a divergence, and this signals concern if long.

    The dip-buyers will come in at some point, that is where the SPX S/R numbers will come in handy.

    Watch Keybot in the top left margin, who knows, perhaps the algorithm flips short today?

    ReplyDelete

Note: Only a member of this blog may post a comment.

Subscribe to: Post Comments (Atom)