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Terminal Velocity –> DOWN

$AAPL has taken out the Fib 50% retracement @ $425.00 instead of bouncing off here.  A failure of a Fib support is as significant as a bounce off it.  It may be too early to say that the 50% retracement fails at $425.00 when there are still time for $AAPL to bounce back up above that line.  However, any further drowndraft away from the $425.00 line will signify a Fib 50% support failure.

AAPL_daily

I’ve initiated a small starter position (using stock and put option) based on this thesis and will see how it fairs by the end of day.  If price comes back up above $425.00, I will cover and take my small losses.

My 2 cents.

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Will this $AAPL cider turn into vinegar?

$AAPL down bar today reflects a confirmed correction to the downside simply because it has taken out the low of the bar from Tuesday, May 7th. The daily bars of Wednesday and Thursday failed to take out the Tuesday low; therefore, the trend was still up as far as I was concerned. However, today bar took out Tuesday low and price action was in the vicinity of the 89xma resistance line.

$AAPL price correction today could as well be a minor and healthy retracement. Nevertheless, I will watch for support on the 38.2% Fib retracement level at $434.75 which also happen to be near the support line from April 11th high.

Take a look at $AAPL daily chart below:
AAPL_daily

I bought June 7th 455 put option to short $AAPL. I’m betting that $AAPL correction will try to reach $435 support area before bouncing.

If there is going to be a mini-market correction, it may start next Monday and $AAPL will follow the market with it; otherwise, I will sell my put option pronto Monday morning to cut losses if the rally continues on.

My 2 cents.

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Bullish Candlestick Pattern: “Morning Star” is shining on…

$AAPL.

I got stopped out earlier in the morning during the downdraft but re-entered my position on $AAPL after the dust was settled; therefore I’m still long $AAPL.  If the Morning Star bullish pattern continues to hold until day close, we “may” find the bottom on $AAPL.

Take a look at the Morning Star pattern (inside the circle).

AAPL_daily

Of course, $AAPL earning report after close tomorrow will be the deciding point of $AAPL’s future direction.

Below is the primer on Morning Star Candlestick pattern:

Morning Star

The morning star consists of three candlesticks:

  1. A long black candlestick.
  2. A small white or black candlestick that gaps below the close of the previous candlestick. This candlestick can also be a doji, in which case the pattern would be a morning doji star.
  3. A long white candlestick.

The black candlestick confirms that the decline remains in force and selling dominates. When the second candlestick gaps down, it provides further evidence of selling pressure. However, the decline ceases or slows significantly after the gap and a small candlestick forms. The small candlestick indicates indecision and a possible reversal of trend. If the small candlestick is a doji, the chances of a reversal increase. The third long white candlestick provides bullish confirmation of the reversal.

Broadcom Corp. (BRCM) Candlestick Morning Doji Star example chart from StockCharts.com

After declining from above 180 to below 120, Broadcom (BRCM)[Brcm] formed a morning doji star and subsequently advanced above 160 in the next three days. These are strong reversal patterns and do not require further bullish confirmation, beyond the long white candlestick on the third day. After the advance above 160, a two-week pullback followed and the stock formed a piecing pattern (red arrow) that was confirmed with a large gap up.

My 2 cents.

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Three technical reasons supporting a BOTTOM for $AAPL

Reason number 1: We are at 50% retracement from the low of Jan 2009 and the high of Sep 2012. See the blue horizontal line below in the $AAPL weekly chart.

AAPL_Weekly

Reason number 2: The length of the drop from the high of 03/25 to the low of 04/5 is equal to the length of the drop from the high of 4/11 to the low of 4/19 (today).  See the blue zig-zag line.

AAPL_dailly

Reason number 3: We have a bullish piercing candlestick pattern in development today.  See the two candlesticks inside the circle.

Below is the primer for bullish piercing candlestick pattern:

Piercing Pattern

The piercing pattern is made up of two candlesticks, the first black and the second white. Both candlesticks should have fairly large bodies and the shadows are usually, but not necessarily, small or nonexistent. The white candlestick must open below the previous close and close above the midpoint of the black candlestick’s body. A close below the midpoint might qualify as a reversal, but would not be considered as bullish.

Just as with the bullish engulfing pattern, selling pressure forces the security to open below the previous close, indicating that sellers still have the upper hand on the open. However, buyers step in after the open to push the security higher and it closes above the midpoint of the previous black candlestick’s body. Further strength is required to provide bullish confirmation of this reversal pattern.

CIENA Corp. (CIEN) Candlestick Piercing Pattern example chart from StockCharts.com

In late March and early April 2000, Ciena (CIEN) declined from above 80 to around 40. The stock first touched 40 in early April with a long lower shadow. After a bounce, the stock tested support around 40 again in mid April and formed a piercing pattern. The piercing pattern was confirmed the very next day with a strong advance above 50. Even though there was a setback after confirmation, the stock remained above support and advanced above 70. Also notice the morning doji star in late May.

And for these three reasons, I’m comfortable to buy some $AAPL this morning.

My 2 cents.

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The Insatiable $AAPL wants more!

I was doing my normal stock stalking and then all of a sudden, $AAPL blew me a breeze and winked her eyes at me.  One look at the chart and I could see what $AAPL meant.  She wanted to get high with me.

“Come over here and take me with you, NOW!”

Jeez, I couldn’t say no to that, immediately, I bought some $AAPL and she was right, she really wanted to go higher.

Look at the $AAPL 5m chart below and you will know what I mean:

AAPL_5m

Take a look at the 15m chart below:

$AAPL went over the resistance established yesterday @ 09:45am.

AAPL_15m

So far, $AAPL is making me very happy! 🙂

My 2 cents.

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$AAPL acting like a woman in heat this morning!

This morning action of $AAPL is very unusual.  The sudden burst of energy after 10:00 am was purely titillating.  Like an attractive woman beckoning you to come over.  You know what I mean.  You can’t help but being pull by an unknown force.  You inch closer while the woman, oop! I mean $AAPL, is telling you to take her by the look of her eyes.  She is ready, she seems to say.

So, like a gullible man with a fondness for attractive woman (who isn’t?), I went for it and bought a starter position on $AAPL.

So far, I’m being pinched for the moment.  I’m not sure if I’ll get bitched slap later on.  I sure hope not!

I’m putting a stop below today low just in case she may just be someone who want to steal my wallet…

Look at the 3m $AAPL chart below:

AAPL_3m

You see how excited she became after 10:12am?  How can you not be excited???

Look at the daily chart below:

AAPL_dailly

Did you see how she bounce off the support line last week?  You will see the support line in the weekly chart below

AAPL_Weekly

I’m going to try to sit on this woman, oop again!, I mean $AAPL, for as long as I can.

My 2 cents.

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A Low risk $AAPL long trade

I don’t know about you, but I see a support here at this level.  Take a look at the weekly chart below:

AAPL_Weekly

The way I see this, I can place my stop below yesterday low for a low risk trade on the long side.  This is a low risk “catch the falling knife” trade.

My 2 cents.

My twitter feed does not work here; you can follow me @tradingmy2cents at twitter if you are interested.  Thanks.

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Double-Top Turnover

After throwing numerous AAPL put options against the wall over the span of several months with none of them staying put; I believe today is the day that I finally throw a perfect one that will stick like a well-chewed soggy bubblegum coming off from the mouth of Sandy Olsen (from the movie- Grease).

“How can it not stick this time?”

We’ve a BEAUTIFUL double-top day thanks to the courtesy of today’s big red bar day.  Will this be the last bastion of AAPL’s mighty $600,000,000,000+ (count those zeros!) market cap we ever see again?

Will I, the guy you have been snickered at every times I throw the gum and announce my foolhardy play, be finally vindicated?

Honestly, I really don’t care as long as I recover all those tiny losses here and there PLUS a gazillion more so that I can then go out and buy myself an overpriced iPad to hang on my wall to remind me of today.

Click here to view the large font version of this post

Btw, in the event of an unusual “turn around” rally by end of the day which I am definitely NOT expecting to see, you can go back to your snickering and I’ll go back to my corner and wait for the next opportunity to try again.  If not today, there will be another day.  Nothing, and I mean NOTHING, can stay up FOREVER with that many 000,000,000,000!; especially when Steve Jobs is no longer around.

Remember to follow the price action instead of listening to anyone’s rambling that include me!

End-of-day Chart Update Below:

Below is the end-of-day daily AAPL chart:

Below is the end-of-day AAPL 15m chart:

We will see if tomorrow will continue the downtrend.

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AAPL cider anyone?

Here we go again!  Actually, it is more like “Here I go again!”

I like to pick on AAPL ’cause it tastes the sweetest when it is the most crunchier.

We have a dark cloud hovering over the AAPL candlestick chart right now.  This is a potential bearish signal (and how many times have I said that?) which I am willing to bet that this is the last time you are going to see AAPL trading at $67X level.  Again I initiated a small starter position to short AAPL using the Sept 21st  $675 strike price put option to test my luck.

What you see in the chart below is the making of a dark cloud cover candlestick pattern which has the “potential” to signal a bearish reversal.   Tomorrow will be the confirmation day if price open below today close and continue to head lower.

“What about iPhone 5 debut on the coming Sept 12 announcement?”

Good question!  I see two ways price action will take on that day.  A very BIG UP day or a very BIG DOWN day.  For now, I’m letting the chart tells me what to do.  There are still 7 days to judgement day so I am not going to worry about it right now.

Potentially, today high may becomes the next lower pivot high next to the highest high formed on August 27th.  Thus, for the up trend to continue, today high must be taken out in the near future.  It will also be used as a basis for my stop to cut my losses in case I’m wrong, yes, again!

Click here to to see the larger font version of this post: following price action.

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