{"id":6758,"date":"2011-08-16T21:38:44","date_gmt":"2011-08-17T01:38:44","guid":{"rendered":"http:\/\/drduru.com\/onetwentytwo\/?p=6758"},"modified":"2011-08-16T21:38:44","modified_gmt":"2011-08-17T01:38:44","slug":"apple-holds-firm-thru-sell-off","status":"publish","type":"post","link":"https:\/\/drduru.com\/onetwentytwo\/2011\/08\/16\/apple-holds-firm-thru-sell-off\/","title":{"rendered":"Chart Review: Apple Holds Firm Through the Sell-Off"},"content":{"rendered":"

On July 26, Apple (AAPL) finally closed above $400. I interpreted this as a very bullish signal. I waited for the next dip to make a move, and the very next day, the market seemed to offer up a gift in the form of a 2.7% pullback. I wrote the following in my technical review (T2108 Update) for that day<\/a>:<\/p>\n

“I may have been pre-mature, but I used today\u2019s drop in AAPL to finally initiate a small position (a Jan 2012 430\/435 call spread). Given the expiration 6 months from now, this is clearly not a short-term trade. I fully expect AAPL to approach these levels at some point between now and then, likely during the next overbought period in the stock market. If I were being more conservative I would have made AAPL \u201cprove\u201d itself by achieving another close above $400 first.”<\/p><\/blockquote>\n

I was indeed early. If I had waited I would have paid less for a bullish position and received a better strike as I would have loaded up during this oversold period<\/a>. The good news is that AAPL has held up well during this sell-off AND the call spread has barely budged in value during the entire time. The strategy is working as intended by providing me the luxury of patience. The chart below shows that AAPL held firm at the 50-day moving average (DMA). <\/p>\n


\n
\"AAPL<\/a>
AAPL has held firm during the sell-off so far<\/figcaption><\/figure>
\nSource: stockcharts.com<\/a><\/strong>
\n<\/center><\/p>\n

While the chart looks relatively healthy, AAPL does need to keep some buying momentum here. Otherwise, a drop from these levels will likely not only retest the 50DMA, but send AAPL to a retest of the 200DMA. The biggest drawback to the latest rally is the precipitous drop in volume on the way, especially compared to the massive selling volume on the way down.<\/p>\n

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

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

On July 26, Apple (AAPL) finally closed above $400. I interpreted this as a very bullish signal. I waited for the next dip to make a move, and the very next day, the market seemed to offer up a gift in the form of a 2.7% pullback. I wrote the following in my technical review … 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":[219,135,62],"tags":[250,534,1597],"class_list":["post-6758","post","type-post","status-publish","format-standard","hentry","category-high-tech","category-stock-market-trading","category-technical-analysis","tag-aapl","tag-apple-inc","tag-technical-analysis"],"yoast_head":"\nChart Review: Apple Holds Firm Through the Sell-Off - 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\/2011\/08\/16\/apple-holds-firm-thru-sell-off\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Chart Review: Apple Holds Firm Through the Sell-Off - ONE-TWENTY TWO: Trading Financial Markets\" \/>\n<meta property=\"og:description\" content=\"On July 26, Apple (AAPL) finally closed above $400. 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