Apple Inc. (NASDAQ: AAPL)

Apple Inc. designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players to consumers, small and mid-sized businesses, and education, enterprise, and government customers worldwide.

Take a look at the 1-year chart of Apple (NASDAQ: AAPL) below with the added notations:

1-year chart of Apple (NASDAQ: AAPL)

After rallying consistently higher for the past year, AAPL is in the midst of another pullback. Since the beginning of May, the stock created a key level to watch at $155. That price has already acted as both resistance and support.

The Tale of the Tape: AAPL has a key level at $155. Traders could enter a long position on a test of $155, with a stop placed below that level. Traders that are bearish on the stock may want to enter a short position on a break below that level instead.

Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.

No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!

Good luck!

Christian Tharp, CMT