By: Scott Redler
With the jobs number out and the market oversold, I focused on trying to find a bounce in Apple (AAPL) and Goldman Sachs (GS). In this morning’s note, I highlighted exactly what I would look for. This is what I wrote:
…watch Apple (AAPL)–it had a second downmove yesterday from the $194-195 zone. Some will try to short that zone for a sell setup. Others will use yesterday’s low (if the market gets pressured) as a pivot. It could trade through that spot for another move lower, catch some support at a lower level, then perhaps trade higher.
Both worked trades worked well to generate cash flow. We call this setup the REDDOG REVERSAL. It’s a play to trade a calculated long (or short) in an overextended market.
Here are the charts to provide a visual description of the two setups. First is AAPL:
…and here’s Goldman:
You can either take the money already earned from the trade, or sell some and leave the rest on the table with some room to run for a day or two swing. It all depends on your personal trading time horizon.
