Apple Inc. (NASDAQ: AAPL)

Apple Inc. designs, manufactures, and markets mobile communication and media devices, and personal computers to consumers, and small and mid-sized businesses; and education, enterprise, and government customers worldwide. The company also sells related software, services, accessories, networking solutions, and third-party digital content and applications.

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

1-year chart of Apple (Nasdaq: AAPL)

AAPL has been climbing higher over the past couple of months, and during that stretch the stock has created key price levels at the increments of $5 (blue). For example, the current level of support is $190, that level was also prior resistance in May. Next, $195 is the most recent resistance, and $185 is a previous support.

The Tale of the Tape: AAPL is approaching its key level of $195. A long trade could be made on a break above that level with a stop placed under it. A short trade could be made on a break below $190 with the expectation of a fall down to the next $5 level at $185.

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