I’m going to take this one from the pages of one of my friends, Steve Burns.
Here are TEN facts from the Apple Inc. (AAPL) chart
#1 AAPL had a 1:7 split just a few days ago. This is the first time AAPL has had a stock split since February 2005 and before that June 2000. Many investors, big and small, will likely see this as a buying opportunity.
#2 I have stated throughout all social networks (when asked my opinion of AAPL post split) that it would likely sell off a tad and that buying the bounce would be the best chance for great risk management.
#3 With the post-split chart, the peak in April 2012, the $91 price range was old resistance and is now acting as new support.
#4 AAPL is nicely above the 20 simple moving average. The dark gray line on my chart is the 20 SMA.
#5 AAPL has been making higher highs and higher lows on the daily chart since July 2013, with two bullish gaps that have presently (as of June 19th 2014) remained open, or unfilled.
#6 AAPL is above the 50 exponential moving average as well as the 100 and 200 simple moving averages.
#7 AAPL as a company, still has over $40 billion in cash according to the most recent quarterly report. Along with this, here’s a hidden fact that’s important to consider: 40 billion is a lot of anything, especially money.
#8 On June 16th, AAPL had a white candle that opened and closed above the close of the black candle on the 13th of June.
#9 The direction of AAPL on both the Primary and Intermediate trends is bullish. The minor trend (last few days) is bearish, yes; but that’s simply allowing the buyers of AAPL to gain momentum. Those who bought are selling for a profit and locking in their returns. The short sellers made a little bit of money and now the $91 price level is acting as a great support.
#10 This trade has great risk/reward. As a trader, I would wait for a close above $92.91 to enter, and my stop would be at $90.73. That’s $1.18 risk. My target on AAPL is $100.00 even. This is the post-split, all time high. Therefore, the potential reward is $100 – $92.91 = $7.09. The risk/reward ratio would look like $1.18/$7.09 and that, my friends, is beautiful.
It will be exciting to see if AAPL does indeed bounce. It most certainly does not have to, but if it does, entering in the direction of the trend makes the most sense. Enjoy your upcoming weekend everyone, and happy returns!
