The weekly chart shows an H&S with head at 705, neckline at 520-ish, so the lower target is 335, call it the 300-340 zone, for the weeks and months ahead, perhaps as Labor Day and the holidays approach. But for now, the bulls should have a few days, couple weeks, or a month or so, of upside ahead. Keystone's 80/20 rule says 2's lead to 8's, so a break of the critical 420 support will likely lead to 380. Thus, an additional scale-in for the long position, if the trade goes south, can occur at 380-ish. At this juncture, the expectation is that 420 support holds. Price may take a sharp intraday drop to 410 or 405 but may immediately recover in minutes, making this action, should it occur, a very nice low point to snag right now.
The projection is for a strong bounce in Apple at any time. This will lead to a few days of upside but then price should reverse lower once again. This jog move lower will be short-lived and then a more substantive up move will occur. The idea for the trade is to perhaps play it cute, look for the initial bounce and take profits, then reenter long when price comes back down for another low. Overall, however, AAPL will likely languish through the year with a move through the 300-530 range. Short-term, the trade is on the bull side. 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.
80/20 is in full effect here and you are right. Question is at this point how long the laggering under the 20 if it fails to 419 again which it did and recovered to the 435. That price was interesting as any hold at 435 to 440 would have launched higher to the the 450's and then of course to possibly 460 and then 480 on positive news but that is not happening yet. My trading here would suggest if 419 fails then yes 410 or 405 before a big bounce as you said, a news whatever propaganda etc which would regain 435 (by the way also the low on Monday weeks back before 442 then 480 again, on the einhorn thing that shot apple to 480) Since then I have seen the break of 442, and then the critical 435. A bounce to 435 pretty much on the number (which was the low weeks back before the rise to 480 as I already said.) So this is interesting. In a nutshell, if 435 is broken upward, look for 442. If 19 is busted look for 410 405. 80/20 rule rules for short term trading.
ReplyDeletealso our RSI is not their yet, almost, anything lower will take us to like 20 or so which will be the gas in the rocket bounce.
ReplyDeleteFor what it's worth, I haven't been huge Apple fan, but what I'm reading in the mill these days is just poppycock. Barclays downgrades them because Apple says they will never make a low-end product. Jeeze, the junk market is already saturated. It's like criticizing Mercedes for not making an Escort.
ReplyDeleteOn the phone front, I'm on my third Android. Each one a bigger piece of junk than the one before. Guess what I'm getting next contract? On the PC front, I just bought a new laptop preloaded with Windows 8. Now, I know our expectations aren't very high for MSFT, but for the first time ever I was literally embarrassed for them. It's like 5 non-intuitive steps to do anything on the Windows 8. I feel really bad for them. They have employees working there that have to go home and kiss their spouses in the evening, look their children in the eyes, and say "yeah, I made that." Really, it's embarrassing how crappy it is. So, this notion that Apple is somehow going down the tubes is overstated, as long their competitors keep producing junk. CTRl+ALT+Del/task manager/ setting/ power/ shutdown.
Great comments Anon and Shane. The ebb and flow in trading follows the same cycle all the time, stocks get overly beaten on the downside and when everyone hates them, they recover, and conversely, when everyone is euphoric and the sky is the limit, that is the top, like AAPL's 1000+ analyst price targets last year that signaled the top. (And GOOG's 1000+ targets that now signal the top in Google). A lot of times it is not even about the user experience, it is more about the perception of the user experience. The underlying products may be fine despite the price levels. It is more important as to if the ticker is overpriced, or not, and the negative divergence is helpful in telling you it is running out of gas, or positive divergence for launch time, but both these conditions can be far removed from the current perception of the products themselves. That is what is nice about charts, they have all this emotion and thought, and current news, all built into the chart on every given day.
ReplyDeletethanks KS and others for your comments and insights. I loaded up at 422, and not regretting it. Seems like the 80/20 rule is now also in effect on a smaller scale: 428 -> 432. I must say the upside looks more impulsive than the down side, and I can sure as hell count 5 waves up from the 419 low to the recent 435 high, whereas the decline to the 421 low today counts best as a 3 wave decline... that tells me the upside has begun... although an ABC pattern, with a 5-3-5 structure can so far not be excluded... However, I am fully on board with KS and the downside risk seems limited vs the upside reward. I'll add more at $400 and $380 IF price ever gets there....
ReplyDeletesome other stocks I am long in and that are due for their 80/20 fulfillment:
ReplyDeleteDECK (trading at $49 now, thus $52 next logical step) long since $40
FB (trading at $28 now, thus $32 next logical step), long since $27
HPQ, (trading at $20 now, thus $22 next logical step; 18->22), long since $16.75
PGH (trading at $4.95 now, thus $5.20 next logical step) long since $4.20
SBUX (trading at $58 now, thus $62 next logical step) long since $51
S (trading at $5.80s now, thus $6.20 next logical step), long since $5.60
Great insight on those pics Arnie, it is interesting to note APPL movement today,the 430 high is lingering and so we may see the neutral gear for a day or two,(435 is needed i feel to hold for the 442) the retraction of the market that seems logical in the next few days, will be interesting for AAPL. A nice down day(s) may be our signal...if AAPL doesn't move lower on those days then the bottoms in, if the market corrects and APPL corrects past the 420, it will be the shrew in the open field for the hawks in us to strike hard. Having AAPL as the lonely lovely lady at the party, outside on the terrace not drunk like the rest, while inside everyone else is having a blast getting higher, and indulging, will be interesting when the parties over. Time soon to notice her and ask her at least for a ride home. She maybe the one you hook up with when the parties over. The good one not the party girl. Here we go attacking 430, watch for that 435.
ReplyDeleteYes, and remember that KS is a awesome hawk when it comes to bottom scalping. Do we need to say HPQ and FB. He was on those, while everybody else was tramping each beyond recognition and look where each is now. $10s higher... Money is made in the bottom of the pit. Not at the top.
DeleteOne note of interest. Compare weekly AAPL chart now, with GOOG late '07 early '08. GOOG dropped then from 747 to 412, then jumped to 602, crashed to 247 and look where it is now. The set up is similar (even price level) and IMHO we may see AAPL run to 600 or so, before it drops to 200, when the next big buying opportunity of a life time may occur. But, that's so far ahead and speculative, though very striking similarity...