AAPL Update

AAPL has been synonymous with NASDAQ 100 / QQQ support, which is one of the reasons we have been tracking it. As a trade, AAPL is not my favorite, but I do think on a bounce it can be shorted for a decent swing, I just think there are better opportunities out there as AAPL transitions from a mega growth stock like MSFT use to be to a blue chip, stable dividend paying stock like MSFT is now.

In any case, for both AAPL and the NASDAQ 100, this is an update picking up from our last one on Wednesday, November 26th, AAPL Update

In last week's post linked above, we were looking at both AAPL distribution and a head fake move probability, both have come to pass.

The first 1st and 3rd charts are from last week's update

 This intraday 1 min shows a bullish consolidation/continuation triangle that I thought would see a head fake move above the triangle as technical traders would expect and a move back below, since then...

A small head fake move setting a bull trap was made above the triangle (yellow) as traders buy on breakout confirmation, thus this morning many were stopped out as a common place to put a stop is below support of the triangle and look at that volume this morning as AAPL broke below those stops.

Aslo from last week...

 The clear change in character in AAPL/3C from in line on this 5 min 3C chart which was confirming the uptrend and thus providing QQQ with support with AAPL's weight on the Index and a clear transition to distribution.

This 30 min chart (current) also shows the transition to distribution.

The 10 min chart shows the deep distribution late Friday in to the close and as usual, price action picks up right where 3C divergences left off, even over long weekends.

 This is the 5 min chart now, close to in line and as such AAPL is consolidating.

The shorter 2 min (also weaker) is showing minor accumulation of the stops hit this morning as there was plenty of supply at cheap prices and we get a bounce which that can be sold in to. At that amount of supply, that's a quick and very easy buck for HFT's. However AAPL also appears to still be in line intraday on a 5 min chart.

As it does on an intraday 1 min chart.

When looking at a 60 min chart, you can see AAPL's accumulation area which is EXACTLY the same as the broad market, mid-October at the October lows and the divegrence recently since.

I do think this will carry AAPL lower, but it's not my favorite trade, it probably means more to me in that it won't be supporting the Q's, but if I were to enter an AAPL short I'd want a lower risk entry and with the market gearing up and trying to build a toe-hold for a bounce to try to tackle this morning's gap, AAPL might provide it.

The area I'd want to enter to make it worthwhile...

I'd want a move at or above $119.75, another head fake on the triangle and a higher high which is the only thing I think will get longs to buy and thus provide the demand for smart money to sell in to. From there my target would be the October lows and of course asses the situation as we move forward, but for me, I'd want to get a better entry with much lower risk considering there are so many other positions like inverse ETF's (leveraged) of the averages themselves that look like stronger positions.

*Remember if you are short when a stock goes ex-dividend, you pay the dividend which normally isn't a concern if you have an edge and are in the right trade.