Last Update: 1.14.13
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Related Articles
Article from 9/28/12 “10 Reasons of Why I am Extremely Bearish on $AAPL”
Article from 12/15/12 “Why I Believe $AAPL is Headed $360”
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1.1.13 Tuesday
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Watch 10EMA and 50EMA
(Daily Chart | 10EMA-Green, 50EMA-Pink)
Yesterday we had huge break-out with good volume spike and I did not yet get in to long positions as I was not in the office at that moment so here is my short-term bullish trade setup. Many of you know that I do not chase after a trade if I missed a good entry. The best entry would’ve been just above 10EMA (green) yesterday and obviously I missed it so here is how I am going to play this tomorrow as I will be watching it closely intra day.
If we gap up tomorrow or it continues to rise higher without any kind of retracement (pull back), I will forget about this bullish trade all together. Only way to get me to jump in bullish tomorrow is IF or WHEN it retraces back down to retest that 10EMA area (see red arrow) which is $522ish just like it did back in November 20th. If it comes down to that level tomorrow, I will enter bullish.
Once I enter long position, my 1st target would be at around $560 (see blue arrow) where 50EMA is hanging around. Got to watch that area very closely as 50EMA has been served as pretty STRONG resistance last two times (see blue arrows).
If we break above $560, next target would be $590 which is the peak of the December 3rd. That level for sure will be a solid resistance because it rolled over back in December 3rd after hitting that price level and also 200SMA is residing just above that vicinity.
Bullish Divergence on the Oscillators
(Daily Chart | Stoch, RSI, MACD, MFI)
$AAPL acts very well to these Divergences. Remember the fall late September? Well we did have Bearish Divergence at $700 level and now we have the Bullish Divergence. High probability that it is going to play out but the question is how well and how long.
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1.2.13 Wednesday 10:15AM CT
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iShort (Puts) After Open @ $551.98
(Daily Chart | 10EMA-Green, 50EMA-Pink)
That long term downtrend resistance has not been established but it’s suspected resistance for now also that area is coinciding with horizontal recent resistance along with 50EMA all in-syncing in that vicinity so I decided to enter short just little bit after open this morning.
If we can fill the rest of the gap by EOD, that would signify huge bearish reversal formation for $AAPL. Will see.
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1.3.13 Thursday 12:41PM CT
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Still Holding Short, Long Trigger in Place
(Daily Chart, 200SMA)
I am still holding my bearish positions since open yesterday morning however it looks like we are forming some sort of bullish continuation pattern here. I am not sure what yet possibly bullish flag, stair-step or pennant but from the looks of it, its been holding up well. Key level is that we do not close below $540 area this week if you are a Bull and converse is true if you are a bear, you want it to close below $540 this week or early next week.
But because today’s action has been pretty weak (for Bears), I decided to put in bullish contingency order for trade order execution if stock trades above 50EMA level which is around $560, I will be triggered long positions while my short positions get closed. However if we continue to travel lower in this vicinity and filling the gap to the downside, my bullish trigger will be obsolete and will continue to hold my bearish positions.
- If triggered bullish, upside target: $600 (where 200SMA is residing)
- If breached $540 level, downside target: $500
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Bullish Argument
- We are in Bullish market as a whole with strong bullish action last few days
- Bullish Divergences ($AAPL reacts very well to these Divergences)
- Gap from yesterday is still open and it seems like $AAPL is holding up well so far
Bearish Argument
- Long term downtrend resistance from $700 (not confirmed yet) could act as strong resistance
- 50EMA has been acting as strong resistance
- Still in bearish trend with possible weekly Head and Shoulders reversal
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1.4.13 Friday 9:04AM CT
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iShort More (Puts) @ $535.49
(Daily Chart | 50EMA)
Three Black Crows (reversal pattern) flying low under 50EMA.
Short-term Reversal Patterns
- Island Top Reversal (gaped up and gaped down thus creating an Island)
- Three Black Crows (last three black candles)
- Target: $500
After Close
Week Ending Weekly Chart | 50EMA
50EMA is continue to give $AAPL problem on this weekly chart and the daily chart. Look at the long upper wick formed ending the week today. Just few days ago, this weekly chart looked mighty bullish with the full white candle and it sure did turned around very quickly here.
I wouldn’t call that a Shooting Star reversal because it did not form at the top of trend but in the middle of this sideways movement so I don’t think that candle signifies anything except the fact that bulls took a chance to make a run for it but failed. Look at the declining volume last 4-5 weeks while $AAPL continue to move sideways on this weekly chart. To me, it looks like a continuation pattern such as Stair-step continuation.
$500 level is where bulls need to hold next week or bottom might just fall out and when it does this might just happen.
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1.8.13 Tuesday
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Still Holding Short Positions, Bear Flag
Looks like a Bear Flag to me as the stock trying to climb up but the volume is falling. We’ve had similar situations recently as I have drawn the lines on this chart. Stock goes up, volume falls, stock comes down. That’s what has been working here.
Another possible scenario could be that it might be slowly climbing up to test that long-term downtrend line from above. Either way, if it going to get up, it will have to be supported with some volume spikes otherwise, the gravity force (bears in this case) will drag it down continually.
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1.9.13 Wednesday
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Bear Flagged, Say Hello to $505 Tomorrow
My target is approaching very quickly here at $505. I will be closing most of my bearish positions (Put Options) tomorrow when it touches $505 and I probably keep some just to see if we can break below. Breaking below and closing below $500 level will cause massive panic SELLING.
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1.10.13 Thursday 8:45AM CT
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iShort (Puts) More @ Open $528.98
(20EMA – Light Green | 50EMA – Pink)
Still trading below 20EMA, I bought MORE Put Options at open. Target still remains $505 vicinity and $515 is next recent support.
After Close
Indeed $515 did act as short-term support and NO this does not mean “WE ARE GOING TO $560 TOMORROW!!!” as I’ve seen someone tweeted that. But here are few scenarios I see happening tomorrow.
- We get up tomorrow but hit that long term downtrend line and struggles to get up any higher
- See yellow shaded boxes – After three days of bearish run, $AAPL consolidated a bit by moving sideways for 4 days and then it resumed it’s bearish move and likely it could happen tomorrow.
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1.14.13 Monday 10:10AM CT
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Holding Full Bearish Positions But Maybe Not So Long
If we don’t close strong today, I am afraid there is a high possibility that bulls might have their runs like they did back in 12/14. What happened was, it gaped down on 12/14 and closed with just a Spinning Top candle and on the next day, we had bullish turn around and I am wondering if it’s going to do the same tomorrow. And from the price action so far, I can only assume that the outcome possibly be the similar.
So here is my plan with my bearish positions. Unless it starts to trade below $500 level 20mins before close, I will be completely closing out all my bearish positions before close. Tomorrow, depending on the price action, I might get into little bit of bullish positions for short-term but that has not been determined as of now.
11:10AM CT
Closed Out 1/2 of my Bearish Positions
2:59PM CT
I am Completely Out of My Bearish Positions @ $501.10
$50 bearish trade in two weeks.
50 thoughts on “Short-term Bullish Trade Idea Gone Rogue $AAPL”
Kay, thanks for sharing this. As usual, great article! I missed it too even though I sit right in front of the computer because I was too scared. I really need to learn TA quickly so I can do better in trading. Your confirmation makes me much more comfortable to enter this trade if it is set up like you said here. Thank you very much! Good night!
@Ellen168 hey Ellen~ well its always good to be cautious as $AAPL has been in this uncertainty for sometime now and even now I am not fully confident in long term bullish trade and thats y this set up will only be for a short-term. It means we are still in BEARISH Trend in the big picture. which I will be looking to enter bearish positions if it allows me. But yea for now I think we might have some short-term bullish run. If it retests 10EMA, get in bullish and put your stop $517 area or below. and as the stock moves up watch your 10EMA and put your stop just below 10EMA as it moves up~ GL! =)
@2kaykim Kay, thank you very much for the guidance/suggestions. I’ll set up my trade/stop like what you said here.
@Ellen168 10EMA is good tight stop that I use for swing trading.. if you want to do more of longer term trading 20EMA is good stop.
@2kaykim OK. Thanks.
@Ellen168 hey have u been shorting?
@2kaykim Kay, unfortunately, I wasn’t. Instead, I bought Apr13 calls and it is way down. Should I sell those calls? Also, the worst thing for me is I don’t sell them quickly to cut loss.
Kay, next time, when you make a move, can you please drop me a note? I always get the stock direction wrong and it is really killing me. Thank you for all your guidance.
@Ellen168 y didnt u follow my instruction so u dun chase after this huge gap?? i said it on my post not to chase
@2kaykim I heard you. But I was bad and not disciplined. I need to be more structured and follow rules. sigh. Anyway, have a great weekend! Thank you for everything.
@Ellen168 one thing I’ve learned last 5 years of trading… NEVER CHASE A trade
@2kaykim @Ellen168 No kidding. Done that too many times. mostly lost money. Hard even now. Don’t know how you have the discipline. Any tips?
@Zex_M19 @Ellen168 Zex to be honest its tough for everyone and even for me today but I’ve been disicplined myself for about 3 years now and i always shout out “dO NOT CHASE IT DO NOT CHASE IT” so i guess that mindset has been engraved on my brain since I’ve been saying that over the years. when I chase a trade, I always lose money and i learned it in hard way. Just like on this post. If i would’ve chased the gap up, I would’ve lost but instead i waited and got in bearish and now im making money. so it just takes time….
@Ellen168 r u still in $QQQ short positions? I am…
@2kaykim Yes. I am. I am also in Spy short. I wasn’t sure if we get a recession, so I bought the OTM spy shorts expires Jan 2014. So, I have time to get out later.
@Ellen168 yea i think we will get in recession.. if you look at my overall market analysis we got all kinds of bearish reversal patterns forming on the weekly so it might take 2-4 weeks to show it but i think the market is going to roll over this year….
@Ellen168 i had $SPY shorts and i got stopped out yesterday. im thinking to re-enter bearish this week or next
@2kaykim I agree with you. With so much debts and deficits. The economy won’t be good in the long run no matter how much money you print (In fact, the more money you print the less valuable dollar is). USA is in trouble.
@Ellen168 agreed
Hi, Kay
do you have real time reminder after open or close posiition?
thanks
@shawn008 well i do update my blog real time and I tweet it when I do. so you can follow me on twitter or ST. Also sometimes when I write a new post, I don’t always tweet it so that the blog followers have advantage of seeing the article (cuz if u follow my blog, it will notify u via email as soon as any article is published). Any updated articles will be tweeted so you can set an alert for my tweets. thnx for visiting.
Hi Kay, do you have some predictions for AAPL’s earning? How would you trade that? Thanks for sharing.
@Ellen168 i dun trade earnings specally on $AAPL. Id probably just stay on the sideline until after ER
Kay, SPY is tanking today. I am shorting it since last Friday. What do you think about the targets? I think it could
go to 142.73, 50% Fib retracement. It is also the neckline for the 9/13 to 10/23. I maybe wrong because I am new in learning about charts.
@Ellen168 hmm well i wouldn’t just yet short SPY yet… at least wait until below $144.59 and even then that’s pretty aggressive… put your stop $146.70. Because we might be forming a bullish continuation pattern here
@2kaykim Kay, I am really frustrated. Everytime I enter I lose money. I don’t know what to do now. Should I get out of my AAPL long here? I lost too much money.
@Ellen168 on last post I’ve already told you to put stop below 10EMA and you should’ve been stopped out already… y haven’t u listened?
@2kaykim Kay, I entere 549. When you told me it was too late. I am bad at risk management. From now on, I’ll just follow your instructions. I promise. I don’t know how I can survive here.
BTW, I get out of SPY short and lost some money again (500). I was nervous.
@Ellen168 well you got two choice. put your stop below today’s low or below $505. or you can just get out.. uve been dragging this thing too long Ellen…
@2kaykim You think next couple days will AAPL go up? usually they do.
@Ellen168 possibly yes… as of today, hard to tell
@2kaykim I am in big trouble.
Kay, what is your target for SPY?
@Ellen168 i dun have target since im not in the trade… but im kinda smelling Island Top reversal on $SPY $DIA $BAC right now.. hmmmmm
S&P hitting new highs? Could be a signal that market is getting top heavy. If you look at long term chart for S&P500 (I used Yahoo chart with MAX range, you get an alarming picture! IT IS RANGE BOUND!! 1st peak in March 2000 before dot com bubble burst, 2nd in July 2007 before housing market bubble burst. Both times slightly above 1.5K peak. And here we are at 1,472! But look again…1st bottom at July 2002, 2nd at March 2009. Both bottomed at 800!! So it looks like we are ranged bound between 800 and 1500 in the S&P. Took 1 year for it to crash during first peak and only took 6 months at the top for it to crash the second time. I believe that we could be hitting a double dip recession which means we could see it sometime next year after S&P climbs past 1,500 this year. Then it would have to consolidate on the top for a few months before it falls and keeps falling. There is a 7 year time frame between the peaks. If chart holds true then we should see drop in 2014 (last peak in 2007). That gives it enough time to climb, hold a few months, then start dropping. WOW! If you just look at long term S&P chart and guess when it will crash and expect S&P to follow in same pattern given the time frame, then it looks like 2014 could get really ugly. With high unemployment and housing prices still very low, it doesn’t make sense to me why S&P500 levels are at the same levels when the economy was roaring during the peak of the housing boom. But I have a theory.
@Zex_M19 I think what you said here is very possible.
@Zex_M19 yea well here is my analysis on the overall market for 2013.. http://2tradersclub.com/2012/12/18/djia-spx-compq-market-sentiment-is-bullish/ we don’t have any confirmation as of now but something isn’t right in the charts and possible market crash is on its way.. there are also few clips from different market analyst calling the same thing
@Zex_M19 @TraderEllen watch this video Tom DeMark. we are getting close to sell on US http://www.bloomberg.com/video/tom-demark-sell-around-the-world-KdBPeJbXQXqvlShFYHL7Jw.html
Even the DOW is near that 14k high! We should see it this year.
hit that $500 floor. sold my puts this morning and bought some short term weekly calls in aapl.
good luck.
@Zex_M19 Good luck Zex. still holding onto my Puts.. however I might be closing it before EOD if it doesn’t trade below $500 level
Sold my calls already. Was hoping for a quick bounce off that $500 which i got. Not much but better than nothing. Will sit and wait now. Close below means i will buy some puts for the next leg down.
Close below $500. Darn fat fingers. Funny thing is that i am posting from my iPhone 5. Ironic.
@Zex_M19 im completely out of my bearish positions just before close
@2kaykim Great job! I know you had a target price of $505 so you did better than what you wanted.
Good job! Kay! Now where is AAPL going?
@TraderEllen thnx Ellen, I just updated the post with what I think could happen until the Earnings
OMG! AAPL falling through $500 in premarket! Is this it? Next leg down to $480? Want to buy some weekly (or actually Jan monthly now) puts. Even though it didn’t break $500 yesterday, it did close at a new low. One thing that can happen is that it could go down to next leg. Then bounce up on earnings (cause it’s priced in) but that would be a dead cat bounce I think. Jesus! Sorry, market opened when I was typing. Bought a crap load of puts options. Wish me luck! Hoping it goes to $480 soon.
@Zex_M19 haha looks like ur doingwell bro! im on sideline right now… yes u r right.. we probably going to have another bounce on earnings and thats when I will be loading up more shorts. until then best of luck to you sir!
@2kaykim @Zex_M19 Closed a lot of my puts a few minutes ago. still have a few left. Can’t sell those until tomorrow (account has less than $25,000 for day trade). Doesn’t matter. I’m up nicely today. I learned my lesson a long time ago…TAKE PROFITS! taking small profits guarantee you made money and better than holding too long and losing money. Nothing more painful than that. Glad I waited a bit. Was hovering around 490-491 but then dropped to 486.
Kay, thanks for you help on this one. I made some real good money going from $500 to $486 and then reversed and rode it up today. Let’s just say profits was in the 5 digits using options. I wouldn’t seen the $480 (actually $483) floor is it wasn’t for your charts. We took out the big move up from the beginning of 2012. Yeah the current support around $480 was established back in 2009. Strong support. The only thing I think that can break it would be another big earnings miss. We could see a short term bullish run here. But to where? I see that Apple hit the 45 day EMA twice (Dec 3 at 595 and on Jan 2 at 556). Not sure if 45 EMA is worth using but it did peak both times at that exact level before falling lower. 45EMA is at 543 right now. Could we see a bull trap rally to those levels (or $600) after earnings? if it goes up but doesn’t break those levels then I might buy some puts. Still bearish on AAPL but we could be seeing a bull trap / dead cat bounce rally for the next few days or weeks. Looks like Tom DeMark could be right. He was so far today.