{"id":11097,"date":"2012-04-17T21:12:59","date_gmt":"2012-04-18T01:12:59","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=11097"},"modified":"2012-04-17T21:12:59","modified_gmt":"2012-04-18T01:12:59","slug":"apple-revenge","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2012\/04\/17\/apple-revenge\/","title":{"rendered":"Chart Review: Apple’s Revenge"},"content":{"rendered":"

It now looks like Monday’s deep dive in Apple (AAPL) may have indeed represented a crescendo of selling<\/a>. The buyers finally showed up in Apple after taking a five-day hiatus. The results were just as impressive as ever when buyers step up for more bites of Apple. It looks like Apple’s reawakening is Apple’s revenge.<\/p>\n

Trading in AAPL did not start well today. Even with the general stock market opening strongly, AAPL dipped as much as 1% before the buying frenzy began. By the close, AAPL erased almost all its losses from yesterday’s crescendo. In a very bullish sign, the buying volume was almost as strong as yesterday’s selling volume. Perhaps a lot of stops got hit yesterday when Apple dipped below the $600 “tripwire.” That could explain why the selling was so strong and swift. If so, yesterday’s crescendo could also represent a washout. Whatever the reason, today’s comeback should quickly generate a lot of regret with yesterday’s sellers. They are not likely to sit long before jumping back into AAPL if $600 holds. This anxiety could provide the next fuel for the stock.<\/p>\n

The $600 level is turning into an important psychological line, and it now represents Apple’s last breakout territory (see the formation in the chart below). Follow-through from here will break April’s downtrend and likely propel Apple to fresh all-time highs (with next week’s earnings standing in the way as the unknown wildcard of course).<\/p>\n


\n
\"Apple<\/a>
Apple attempts a swift and ferocious comeback<\/figcaption><\/figure>
\nSource: FreeStockCharts.com<\/a><\/strong>
\n<\/center><\/p>\n

Although I too was a “seller” yesterday given I was forced to dump my short April put spread before I got assigned any shares, I feel very fortunate that I stuck by the technicals to jump back in the fray with a May call spread before yesterday’s close. In my technical review yesterday<\/a>, I forgot to explain that I chose a call spread as a low risk way of rebuilding a position. It also eliminates almost all of the price of the pre-earnings premium. Similarly, I went short an April put spread last Friday because my overall risk was tightly capped. This feature turned out to be a major relief as Apple failed to hold the $605-$610 level as I had assumed at the time. (That put spread is now back to the value where I originally sold it).<\/p>\n

If I even suspected that Apple’s comeback could be so quick and swift, I might have opted for a more aggressive, out-of-the money fist full of calls. As it stands now, I still have dry powder reserved for Apple if sellers manage to take the stock down again after earnings.<\/p>\n

Be careful out there!<\/p>\n

Full disclosure: long AAPL call spread<\/p>\n","protected":false},"excerpt":{"rendered":"

It now looks like Monday’s deep dive in Apple (AAPL) may have indeed represented a crescendo of selling. The buyers finally showed up in Apple after taking a five-day hiatus. The results were just as impressive as ever when buyers step up for more bites of Apple. It looks like Apple’s reawakening is Apple’s revenge. … Read more<\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[219,62],"tags":[250,534,1597],"class_list":["post-11097","post","type-post","status-publish","format-standard","hentry","category-high-tech","category-technical-analysis","tag-aapl","tag-apple-inc","tag-technical-analysis"],"yoast_head":"\nChart Review: Apple's Revenge - ONE-TWENTY TWO: Trading Financial Markets<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/drduru.com\/onetwentytwo\/2012\/04\/17\/apple-revenge\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chart Review: Apple's Revenge - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"It now looks like Monday’s deep dive in Apple (AAPL) may have indeed represented a crescendo of selling. 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