OVERBOUGHT?
Is Apple (AAPL) overbought and due for a big corrections?
Yes, Apple is overbought, but probably not due for a big corrections. As you can see in the chart below, we did see very similar case in 2017 (see blue arrows) where Apple was overbought but the stock continued to march higher with short-term pullbacks along the way.
Apple managed to move another +70% (in about year and half) after this “overbought” signal has appeared in 2017.
While I don’t believe this is the level to go full-on bullish on Apple, but if you have been long since earlier this year, this could be the signal where you could take partial off but still stick with the long-term trend and ride the remainder positions.
We’ve had pretty smooth ride all year long, but now, I believe the bumpy road is ahead but doesn’t mean it can’t go higher.
- I’ve unloaded 1/3 of my total holding SHARES at 265s (SHARES I’ve been accumulating 140s – 180s) *See Part 1
- I’ve completely closed out my CALL OPTIONS in early November (entry mid-May)
- So now I am holding remainder of my SHARES and preparing to buy the dip if we see a decent size pullback
SECULAR TREND
Below chart of Apple was screened in early January of this year, let’s see how it looks like today.
Here is the updated chart (below).
As you can see, we are not overbought yet in secular trend perspective — we got rooms to move to the upside.
- “Level 1”: First level of overbought signal in the secular trend (I would close 1/2 or more of my holdings there)
- “Level 2”: The ultimate level of overbought signal in the secular trend (I would probably close 90% or more of my holdings there)
So here is my plan.
I would continue to hold my remainder holdings while preparing to accumulate more if we see a decent size pullback while gauging my targeted-levels using my monthly-chart oscillators as shown below.
But as I’ve mentioned on the PART 1:
- Target 1: $300
- Target 2: $320
- Target 3: $370
