Apple (AAPL) Rolls Back Over

Apple, Inc. (AAPL) engages in the design, manufacture, and sale of smartphones, personal computers, tablets, wearables and accessories, and other variety of related services. It operates through the following geographical segments: Americas, Europe, Greater China, Japan, and Rest of Asia Pacific.

Take a look at the 1-year chart of AAPL below with my added notations…

Since popping last August, AAPL has been trending higher, while also forming a nice trend line of support (green) along the way. Any (2) points can start a trend line, but it’s the 3rd test and beyond that confirms its relevance. A pullback to the AAPL line provides trading opportunities, one way or another.

A long position could be entered on a pullback to the trendline, with a stop placed below the level of entry. A short position could be entered if AAPL were to break below its trendline. 

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