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There has been a lot of discussion on this particular thread on Seeking Alpha regarding AAPL, I opted to do some technical analysis on this stock to see if the charts are suggesting if Apple is a short, as the author suggests. It’s been quite an active thread with many traders criticizing the author for even thinking about shoring this stock. I’m of the opinion that nobody should marry a stock no matter how well it’s performed in the past. I’m also cautious when shorting leaders and one has to wait until it officially breaks down before committing. A good rule of them is to sell the second reaction down after a top has formed.
Below is a 4 yr chart that clearly shows a massive cup with handle that played out perfectly. If you measure the distance from the bottom of the cup to the confirmation line, and then add that distance on top of the confirmation line you have a general idea how far the stock should move up if the breakout remains intact. You can see here that it played out to perfection and now is a time one should become cautions and protect your profits.
Another option would be to sell some calls against the stock if you hold shares. That way if you want to hold onto your shares at least you’ll be getting paid some “rent” to hold the stock through a potential pullback.
Apple Weekly Candlesticks
Apple Daily 3 Line Chart
There doesn’t appear to be any weakness in this chart, but it is obviously extended as each pullback is bought up. It’s been riding the 13ema for the last 18 months and is well over 50% it’s 200ema. Not a time to be initiating new long positions. … [visit site to read more]
