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Last Update: 3.11.13
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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”
Article from 1/1/13 – “Short-term Bullish Trade Idea Gone Rogue $AAPL”
Recent (2/13/13) video analysis where I spend little bit more time on $AAPL
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2.12.13 Tuesday
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8:45AM CT: Entered Bearish @ $478.59
(Daily Chart)
Just little bit after open, I entered bearish at around $478.59 because I have reasons to believe that bearishness would roll back into this stock. Let’s break it down.
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Acumen 1 | Long-term Uptrend Now Resistance @ $480
(Weekly Chart)
One of the key fact of my decision was that ‘old support becomes new resistance’ theory. As you can see on this weekly chart that this 4 years of worth uptrend support has been broken early January and stock is now retesting that level. If you flip this chart to daily, you will soon realize that $480 is where it’s hitting as resistance today. Also looking at this weekly chart, it might be forming a bear flag though it is still early to tell.
Acumen 2 | Long-term Downtrend Resistance @ $480
(Daily Chart)
$480 is also another key level because of that long-term downtrend resistance from the September of 2012. It couldn’t even able to touch that long-term downtrend resistance and tanked.
Acumen 3 | Recent Resistance & Volume $480
(Daily Chart)
Again we see that $480 level is the low of 15th of January’s candle which is now acting as resistance and not to mention it is coinciding with long-term downtrend resistance at $480 vicinity. Last three days volume continued to decline while the stock slowly grind to the upside. And even if you look at last three days of candles, you can find that weakness (in candle sentiment) in that recent run. $437 and $425 is my next target and if we break below $425, then my ultimate target of $360 is where its headed.
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2.13.13 Wednesday
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Added More Puts @ $472.55
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2.14.13 Thursday
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Added More Puts @ $468.18 (65Mins Chart)
As you can see on this 65mins chart that we are finding some support at this uptrend support line so the day ended with Doji in the middle of bear flagging action. We break below and close below that uptrend support line tomorrow or early next week, $442 is where it’s headed and I believe it’s going to get there fast when it starts to roll.
(Daily Chart)
Looking at this daily chart and 20EMA (green), last two days have been some pressure from the bears when the bulls were not able to stay above 20EMA. Below 20EMA, so far, it has been the Bears territory. Last 90 days, $AAPL managed to stay above 20EMA only about 10 days. That’s alarming because it has been under duress last two day under 20EMA. Last two days candles tell us that story clearly. Currently finding some support at $465ish level but I do believe (since $AAPL is now in bears territory) that if that $465ish support is broken (by closing below that level with some volume), it could roll over back down to $440, $435 and $425.
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2.15.13 Friday
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Holding Full Bearish Positions | PACMAN Action
PACMAN Action: Every time when lower wick showed up, it ate it (on daily chart)
We are now entering the bears territory (below 20EMA – see arrows) and it does NOT look good for bulls. As you can see on this daily chart, last three months when $AAPL closes below 20EMA, bears start to attack and run this thing down. Still quiet early to say that the bulls are completely destroyed because if you look at today’s volume, it’s still not enough for bears, however today we did close below recent support of $465ish. And I wouldn’t be surprised if $AAPL try to retest that $465 level on Tuesday intra-day and if $465 level holds as new resistance, it’s going back down to $452 and $435 as next recent supports.
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2.20.13 Wednesday
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Tankage Continues…
Volume is increasing thus bears are finding some momentum here. Next support at around $440ish. Still holding full positions.
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2.21.13 Thursday
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Closed 1/3 of my Bearish Positions @ $446.58
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2.25.13 Monday
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9:35AM CT: Added More Puts @ $452.77
As I was tweeting this exact chart this morning that the recent upside move was not supported by volume thus creating bear flag. Also old support was now becoming a new resistance (see arrow).
After Close: Bear Flagged
Next support at $435, if doesn’t hold, $425 is where its headed to fill that remaining gap.
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2.27.13 Wednesday
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12:05PM CT: Added More Puts @ $445.67 (65mins Chart)
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3.1.13 Friday
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Holding All Current Positions
Once it broke major support, that was the end of it. $425 is my next target, however, I wouldn’t be surprised to see $AAPL fizzles around $435 level to test as new resistance next week.
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3.4.13 Monday
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Closed 1/2 of my Bearish Positions @ $422.94
We filled the gap at $420 today and tankage is continuing. However I wouldn’t be surprised to see $AAPL retest $435 level as new resistance sometime next few days.
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3.8.13 Friday
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Added More Puts @ $435.02 & $433.37
Expecting $420 by EOD today or Monday.
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3.11.13 Monday
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I Am Completely Out of My Puts @ $437.16
Here is the Reason Why (65mins Chart)
We closed above important horizontal resistance level and above 50EMA (see arrows) with HIGH Volume. I might think about going long tomorrow depending on the intra-day action for a very short-term.
67 thoughts on “Why I Entered Bearish Today on $AAPL”
Your analysis is spot on. I forgot about that long term support line that is now resistance. This stock is struggling to even get up to the 50sma. I don’t know if you’re looking at the money flow both chalkin’s and mfi. It’s trending up.
@crusauvage yea its true. Stoch, MACD, MFI all trending up currently which shows us that there are some bullish sentiment in this recent move
I think I got out too soon. Should have waited until 440. But I think you are right, we are headed there. bounce off of 435-440. Cook to speak next week, so that could give us the bounce off those levels. Market could be anticipating something good (just like last time) and drive this back up next week. I will look for entry for next week calls.
@Zex_M19 well i do think $435ish we might fine some support which I might take some load off. its always good to take profit. I wouldn’t be surprised one more day of continuation tomorrow and Friday just grind day
@2kaykim looks like you were right. we could see 435-440 either today or tomorrow. bad economic news plus market top is pulling back market. Kay, GDP is next friday. I have been skeptical of this bull market. If GDP is negative, then that is two in a row. isnt’ that the definition of a recession? if it comes in negative (even a little), there will be talk about double dip recession again. could break the market and push apple to fresh new lows. bad economic numbers today. bad economic stories from europe, congress is a no show on sequester, and market top…all looks like a perfect storm for the next week or two. and then GDP at end of next week..!!!!! I am bearish but will sit and wait. if apple moves up before conference, I will buy puts next wed.
Hi Kay, I just wanted to thank you for your spot on analysis.I’m up over $1,000 the past few days buying puts on Apple and Amazon. I’m still holding 300 shares of Apple, and can’t bring myself to sell. I’m going against 2 principles in playing the market. 1. Never fall in love with a stock. 2 Limit your losses. Do you think Apple can recover?
@JackGodoy hi Jack. thnx for your comment. im glad you made some money on AMZN and AAPL! its has been fun trading $AAPL for me ever since $700. N e ways. I am sorry to hear that you are still holding 300 shares of aapl and im not sure when you entered but I wouldn’t want to hold any long positions right now. I do think we might find some bounce at $425 but if you read my past article, my ultimate target is $360. But as of now, my short-term bearish target is $435 and $425 and so far today, we don’t have any bullish reversal signals. Hope that helps GL with your shares.
@2kaykim My average is $560.00 a share. At one point I was up over $50,000, and didn’t take any profit!! because I thought it would just keep going up and I thought it would recover, etc, etc. I feel like a fool, but yet here I sit, just watching helplessly as the stock crumbles, hoping it will recover somewhat. I went from a high of $230,000 in my portfolio to just $68,000 today! I also lost thousands buying call options on Apple, always thinking it would go back up, blindly buying without knowing what to expect, and not setting any stop losses. Foolish.
Right now, I’m afraid if I sell, I won’t be able to buy back the 300 shares I now hold, and I will be left with $68,000 and no way to get that money back.
I know you can’t offer advice on what to do, but I’m sensing you would dump the shares and use what money is left to buy other stocks that have a better opportunity to rise, or keep shorting Apple.
So if it hits $425.00, are you a buyer, in the short term at least?
ps, my 2 apple puts were stopped out a little while ago, so I took a $700.00+ profit.
no I wont be buying any long positions for $AAPL right now. I do think we might find support sometimes next 2-3 trading days. It might get up to $455-$465 level but it will fall again which I will be shorting more at that level.
@2kaykim My Amazon is getting close to being stopped out. I have it set to sell at a $300.00 loss, and right now it’s down $270.00.
Nice recovery by Apple today. Einhorn should speak more often. Everytime he does, the stock gets a bump.
I’m still new to the technical side of analyzing stocks, and I’m hoping your methods are successful. I’ll keep watching, and hopefully learning.
@JackGodoy @2kaykim Brother. I can’t tell you what to do since it’s your money. But if this is up to me and I’m already down that much on my long position. I might as well hold it since it is common (not option). I think at some point after finding a bottom, AAPL will bounce. You can then exit your position for much less loss or if you are lucky, profit. I wouldn’t be surprise to see AAPL back to 600. Just take NFLX as an example. stock dropped from 300 to 50 bucks, now back to 200.
@JackGodoy @2kaykim but you will have to hold for a long time. need lot of patient. 🙂
@2kaykim Let us know when you add to your position.
@tainguyen81 @2kaykim I hear you, tainguyen81. Thanks for the encouraging words. I’m prepared to hold as long as it takes to make back some of my losses. But if it does go to 360.00, like Kay says, it will be very difficult to witness. I imagine it would take at least $10,000 in put options to offset the losses in the stock.
@2kaykim Hi Kay,
So I’m reading this book, “How I made $2,000,000 in the stock market” By Nicolas Darvas, and it’s like reading exactly what happened to me, and what he did about his mistakes. Here’s an excerpt that just screams at me:
“If my stop-losses had not taken me out of the market I could have lost about 50% of my investment. I would have been like a man in a cage, locked in with my holdings and missing my opportunity to make a fortune. The only way I could have escaped would have been by smashing out, taking a 50% loss, possibly ruining myself, and gravely impairing my confidence for future deals.”
I think I’m getting ready to smash out.
He also said there’s no such thing as a $50.00 stock (Or $700.00 stock, in Apples case), if a stock is $49.00, it’s a $49.00 stock (or it’s a $446.00 stock, in Apples case).
Long story short, I should have had a stop loss on my Apple shares, just like any other stock. Blindly holding on and treating it like some sacred cow has made me into the caged animal referenced above.
It is a $446.00 stock on a downtrend, that’s all it is.
I noticed Darvas would place his stops at about 3-4% of the value of the trade. If I treat it like that from here on out, I will sell it if it drops my balance another 4%.
That’s some of what I have learned so far from this book. Basic stuff I should have learned before ever making a trade. But I bought into Apple heavily last year, and was gaining sometimes $10,000 in a week. I thought it could do no wrong. I now realize it was just another trade, and a bad one at that because I let it become one.
Here are my objectives:
1. Right stocks
2. Right timing
3. Small losses
4. Big profits
Here are my weapons:
1. Price and volume
2. Technical analysis
3. Automatic buy order
4. Stop loss sell order
I’ve already taken huge losses on this trade, so you’re probably thinking, why sacrifice another 4% to this loser of a trade?
Maybe I can make it up shorting the stock. If it’s going down to $360.00, I should be able to make a killing.
Keep up the great work on apple, man, and have a good one.
later
@2kaykim
There are no such animals as good stocks or bad stocks. There are only rising stocks and falling stocks. And I should hold the rising ones, and sell the falling ones.
You hear that, Apple? I’m comin’ for ya. You’ve taken enough of my money, and I won’t have it anymore.
I might buy you again, if you are ever in a serious uptrend. But until that happens, sayonara.
My new system requires that I sell the stock if it drops 5-6%, but in this case I can sell anytime because I’ve already lost more than 60%.
My system also requires that I buy stocks on an uptrend, and place stops.
Or sell stocks on a downtrend, and place stops.
The trade should be automatically initiated, and automatically stopped.
Plan your trade and trade your plan.
Being long in a downtrend is not in my plan.
My system requires that I decide right now on a price at which to sell my position in Apple.
Every trade I do must have a pre-determined entry point, and a trailing stop.
Seems like pretty basic stuff, right?
My Apple trade never had a trailing stop……
Trying to win in the market without a plan will backfire every time.
It’s like trying to beat a chessplayer, not knowing how to play chess.
It looks like this will be my last week being long apple for awhile.
Unless the trend reverses.
Just my random thoughts, K
I think I can do this.
Have a profitable week.
I’ll try the same.
Jack Godoy
@2kaykim it hit 455 today and backed down. i thought 46-465 but it is not looking good. could retest that 435 low this week. i don’t think there will be any surprises this wednesday. either einhorn will get his way or cook will. market should know it’s one or the other. also, GDP coming out this friday. some say that they expect last time’s -0.1 GDP to be revised to 0.1. good grief. that is still bad news. only 0.1 growth? we were above 2% not long ago. and will all that printed money from fed? If GDP is negative in ANY way, market will selloff like crazy. also because it’s at the top. gives them good reason to take profit. Could be headed to new lows then. Then it april, earnings could break the back on apple and finally head to 360. I think i will hold my puts until friday. Got a little today.
@JackGodoy good luck Gody
@Zex_M19 yea im gonna be continuing to hold my bearish positions probably rest of the week
WOW, big pop on rumors of a stock split.
I guess we will see tomorrow. IF they don’t announce a split, this will give back all gains and more.
Some of my positions got stopped out. The rest I will hold
Now Doug Kass is saying that rumors are not true..
http://www.streetinsider.com/Rumors/Doug+Kass+Says+Apple+%28AAPL%29+Stock+Split+Rumors+Seems+Baseless/8134053.html
@Zex_M19 I do not think someone announce split in shareholders meeting….that is mainly for voting etc…I do not know why people are expecting that much from tomorrow…..even I do not have any knowledge what is going to happen tomorrow but sounds little wired that they will talk split, cash etc…..do you guys have any idea?
@Zex_M19 Few analyst are saying Tim Cook is going to discuss Apple TV…..how does that sound? Is that a product lauch meeting? People were thinking that AAPL would be in little less limelight after earnings….but I see it is even 10 times more in talks after that….people are generating rumors to get profits….
Agenda of tomorrow’s meeting:
To the shareholders of Apple Inc.:
Notice is hereby given that the 2013 annual meeting of shareholders (the “Annual Meeting”) of Apple Inc., a California corporation (the “Company”), will be held on Wednesday, February 27, 2013 at 9:00 a.m. Pacific Standard Time, in Building 4 of the Company’s principal executive offices located at the address shown above for the following purposes, as more fully described in the accompanying proxy statement (the “Proxy Statement”):
1.To elect the Company’s Board of Directors (the “Board”). The Board intends to present for election the following eight nominees: William Campbell, Timothy Cook, Millard Drexler, Al Gore, Robert Iger, Andrea Jung, Arthur Levinson, and Ronald Sugar;
2.To amend the Company’s Restated Articles of Incorporation to (i) eliminate certain language relating to the term of office of directors in order to facilitate the adoption of majority voting for the election of directors, (ii) eliminate “blank check” preferred stock, (iii) establish a par value for the Company’s common stock of $0.00001 per share and (iv) make other conforming changes as described in more detail in the Proxy Statement;
3.To ratify the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for 2013;
4.To vote on a non-binding advisory resolution to approve executive compensation;
5.To consider two shareholder proposals, if properly presented at the Annual Meeting; and
6.To transact such other business as may properly come before the Annual Meeting and any postponement(s) or adjournment(s) thereof.
@hypT thnx for sharing
So it pops up 10 points on rumors. Then those rumors are false. But now it is only down 4 points. And nothing new was said. Should be down at least $10 today. Ridiculous. Gonna hold on to the rest of my puts until end of week or if it hits below $335 before then.
Looks like a star forming today so far. Will have to see the rest of day to see how it ends.
Well…sell off at end of day just like yesterday. Market keeps going higher.
Investors must be fleeing apple due to frustration. We could revisit that 337-339 level tomorrow.
Opening at 338.
I meant revisit 437-439 and opening at 338.
Should I hold my puts?
Ahhh. Credit Suisse cut estimates. That’s why it’s down. on iPhone worries…
http://www.thestreet.com/story/11856753/1/apple-estimates-cut-on-iphone-worries.html?puc=yahoo&cm_ven=YAHOO
…try again…opening at 438.
sold most. holding on to a little but I am profit no matter what happens.
@Zex_M19 im still holding all of my current positions and holding it over the weekend. but its always good to take profit
kay, will you be out for your positions on apple if it hits 425 today? or will you hold some? Looks like apple has been going down at a steady rate. At this rate when will it hit 360? it looks to be near the middle of April which matches with the timeline for it’s next earnings date. If it hits 360 before April earnings, I might go long. The massive correction will be done and we could see a huge bounce OR if it is well above 360 then we could see panic selling after earnings to 360 and then strong buying during 2nd half of day.
@Zex_M19 you should know by now how I trade bro. I dun just get out of the trade just because it hits certain level . Iam gonna ride it as long as it continues its trend. and any bumps, I will add more
Great call Kay. You predicted support around the 420-425 and here we are. Good support here after a downgrade today. I guess we wait to enter another bearish position huh? I think market is getting a little out of control. It seems like the small guys are getting drawn in now which always indicates that they are too late and we are getting heavy on the top.
Should I be looking to sell covered call of AAPL at this time just to be safe for any downtrend? or it is not advisable as it could be risky…..I am worried about if AAPL announces any buyback of stocks then stocks can bounce for a short period of time and I will miss that if I will sell covered calls……Thanks for your valuable advise on this.
@hypT well we might have short bounce next few days looking at today’s action but I dont expect that run to last that long. every pop up, it will just be another short entry for me until it gives me solid BULLISH Reversal signal with confirmation and we haven’t had that in a really long time. hope that helps.
@2kaykim Thanks.
@2kaykim @hypT Kim where do you see this bounce getting to? I’m thinking it will hit 452 tomorrow as that have been the resistance 4-5 times last week. each time it hit 452, it pulled back. your thought?
Kim, where do you think this bounce is going to? My thought is it will hit 452 tomorrow or thursday morning. I noticed last week it hit 452 a couple times and pulled back right away. so 452 could act as a strong wall.
@tainguyen81 yea highly possible but not sure yet as of today. Needs follow through tomorrow
@2kaykim @tainguyen81 it seems difficult to see AAPL upside now. Most of the investors are reducing their Price Target of AAPL. One panic drop can take AAPL to $400 now. only 4 to 5% drop needed to go below $400 from here……..if we see negativity for this particular company (AAPL) in the market then it can happen anytime…
@2kaykim @tainguyen81 Samsung is releasing S4 next week in NY.
I got stopped out.
looks like flag got broken today,
I believe after such a long down turn, Apple is at the verge of turning to the upside. Very aggressive traders can long here with tight stops.
kay, i am seeing a pennant on apple with higher lows and the top of pennant being around the 434-436 level. The break up to 438 really threw everything off but now it’s behaving more like the pennant again. It should be complete within a day or two.
So we should see a big move up or down soon. I will sit on sidelines to see which way and then jump.in.
Also, is GOOG acting more like Apple was during it’s ramp up? We could see a dump after Samsung Galaxy announcement today just like they did after apple made their announcement. Could be that those who had apple, sold and move their money into GOOG. That could explain the behavior. GOOG not participating in new highs as market is going higher, looks weak. Also, lots of talk about GOOG hitting $1000, just like they did with apple before the fall.
I could see apple going higher while market pulls back with Google leading. But I have to wait a few more days to confirm.
Zex_M19 possible run up to 50EMA next week
So, Kay, did you enter AAPL long today?
TraderEllen i thought about it but no i didn’t get in..
kay, yeah I agree. the biggest move up has been towards that 45-50ema.
AAPL looked strong today while GOOG and AMZN looked weak.
Looks like the rotation out of apple and into google is done so we might even crack that 50ema this time.
I almost bought calls in apple yesterday. Now I’m kicking myself. I had some puts in goog and amzn and cashed them out today. I will look to get into aapl calls next week on any weakness.
Good luck!
I think market grinds higher near term.
I bought some Apple calls this morning. it was down over $5 in premarket but came back on the whole Cyprus issue. Really was looking for weakness to get in and -$5 was close to what I was looking for. But it came back up and knowing it was headed to 45-50 ema, I decided that down a buck or two might be the best I can get.
Gonna hold until $460. hopefully it hits it tomorrow!
I found that I still had 1 goog put in another account and sold this morning. Looks like goog and amzn hitting a support. Both got taken down. The big hill got taken out on both. Really wish I had kept my puts over the weekend. uh well. Was gonna buy some goog calls but decided to concentrate on aapl instead.
Good luck.
WOW! didn’t think it would be up so much today. I got scared so I wanted to lock profits. Day traded and sold today. Will now wait for a good entry for puts. I think if it doesn’t break 50ema, it goes back down and retest 420 low and breaks it this time. chart says this hits 360 bottom right in middle of april during earnings. Its about time we hit new lows towards $400. But I have to see how high it goes first. Probably higher tomorrow with my luck.
Apple up big today because tomorrow (Tues 3/19) is the 1 year anniversary of their dividend announcement…
http://www.fool.com/investing/general/2013/03/18/1-superstitious-reason-apple-rallied-despite-cypru.aspx
If they do announce, I think it goes up but not by much (50ema?). A lot already priced in the last 2 days. But if they don’t…it will easily disappoint and erase all gains in the last few days. I say there is no announcement, this goes to 360 by next earnings and THEN they announce dividend increase like most companies do creating the floor and big bounce. Up 25 points in 2 days on just rumors. Imagine how big it will move up when they actually DO announce.
Zex_M19 nice yea i didn’t touch $AAPL recent rally up. I am wondering how its gonna react to 50EMA on daily as it has been strong resistance last three times since 700 level. Also look at the weekly 10ema which has been working as strong resistance. Also looks like weekly bear flag currently. But looking at last two days action, it looks like buyers are starting to roll in. I am still reluctant to go long yet but poise to go higher as you have dscribed!
45 ema at 461.81. apple hit 460.95. close enough for me.
I doubt there will be any announcement on dividends today (they pre-announced the event last time). And now the iWatch (other reason for this running up) is receiving competition already on news that Samsung is making one too. Unless some news comes out today, there is no reason why apple should not give back all gains last 2-3 days on these speculations. Bought puts today.
I am hoping for a bearish engulfing today.
Zex_M19 didn’t go long nor short yet. seems like sellers are coming in but volume is weak compare to last two days.
2kaykim Zex_M19 hmm…looks like you’re right. buyers coming back.
2kaykim still holding my puts. i think 50 ema will hold. every day there no dividend announcement, i think this gets weaker. Now we see the typical…”open higher only to go red” daily moves that we see when apple has known to ramp down. all this while market goes higher. i will stay bearish until apple hits 360 or breaks 45-50 ema.I’m hoping I’m right and this breaks $420 by end of month. bought april puts so i should be safe.
Kay, are you in AAPL long yet? It looks like has some strength.
TraderEllen possibly but I am not in any position right now on aapl. still under 50EMA and 10EMA on weekly.
2kaykim TraderEllen Looks like we should see any time what happens, wither it breaks out 50ema with strong volume or falls to new lows $400. showing strength but not much volume. that could change any second. suspense is killing me! I wish it would decide.
can you guys teach me how to make this happen?
fmitust https://2tradersclub.com/onair/ sign up for the webinar, I teach it on a weekly basis