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Thursday, October 25, 2012

AAPL Apple Daily Chart Downward-Sloping Channel Earnings Today

Keystone highlighted the negative divergence top as it occurred in September.  The red rising wedge, overbot conditions and negative divergece (red lines) created the smack down.  The weekly chart is nasty as well with firm negative divergence in place.  Typically, once price was thru 680, the 720's would be anticipated but, alas, AAPL topped out at 705-ish. The green downward-sloping channel is in play ever since the move lower began. The last six weeks shows a trend of lower lows and lower highs.  The red box shows the high volume occurring on the sell days as the large funds distribute shares to the bag-holding public as the stock is continually pumped in the media.

Once the sub 620 numbers were printing, a move to the 580's would be in order. Note how price balked at dropping thru the psychological 600 level. If 600 lets loose, the 570-580 may occur in a heartbeat.  The MACD line is firmly negative so even if a price bounce occurs today on earnings, lower prices are desired moving forward, so any bounce is a potential shorting opportunity. Apple really provides no interest on the long side until the 570-590 area prints. A price failure from the 580-ish area would lead to 520-525. Note that AAPL is on an island currently that was formed when price gapped from 425 to 450; the island is 450 and higher.  Earnings hit after the closing bell today. A bounce up to 640-650 would likely provide a nice short opportunity. A drop to the 565-580 area would likely provide an interesting entry for a very short-term long play. Iin general, Apple appears much more attractive to short on the bounces rather than playing it long anymore.  The AAPL weekly chart can easily forecast the path to an eventual island reversal. 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.

Note Added 10/26/12 at 5:52 AM:  AAPL earnings disappoint after the closing bell yesterday. Sales of iPhone's and iPad's are lower than expected. Apple dipped under 600 in the AH's trading
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2 comments:

  1. ArnieOctober 25, 2012 at 12:24 PM

    I agree, though note the positive divergence in MFI, and MACD histo. Also the ssto is less in the sell camp; maybe those 3 suggest the POP you mentioned? Whereas the MACD and weekly charts TI show the longer term path ahead?

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  2. Keystone SpeculatorOctober 26, 2012 at 5:50 AM

    Yep, when you have the mixed set up, the positively diverged indicators will typically bounce the price but the weak and bleak MACD line will want price to make a lower low after a bounce occurs. And the weak weekly chart does point to a malaise for Apple moving forward. Sales of iPhones and iPads disappointed in the earnings report after the bell so this may smack it down more quickly in the near term. A quickie recovery pop may be in play from 580-ish but AAPL is best viewed as a potential short overall moving forward.

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