There are several different timeframes in play here so I'm going to do my best to describe them and obviously depending on your outlook, timeframe, trading style, there are several possibilities.
AAPL, like the market, has been choppy as well. The ascending triangle that formed was really in the wrong place for that type of price formation, but the failed breakout at the yellow arrow probably would have emboldened the shorts. The daily chart earlier looked like a Harami downside reversal, but right now we are seeing the start of the move up I have described today on the short term intraday charts with positive divergences, if traders entered AAPL today on the short side based on the Harami reversal, they may be covering shorts right now, although it isn't a huge pattern, AAPL is closely watched.
The 60 min chart went positive in mid May and has moved up since then, but now the 60 min chart is a bit negative, indicating that a pullback would probably be the logical next significant price move, which is in line with our market expectations.
The 4 hour chart is leading positive, so just as I believe we will see a pullback in the market and then a resumption of the move up in to a real short squeeze, AAPL is displaying the same potential on this long and important timeframe.
The shorter 15 min chart has a negative divergence suggesting the same pullback I envision for the market in the near term.
The 5 min chart for the most part agrees.
On an intraday basis, the 2 min chart has been in a leading positive position since 12 p.m., similar to the intraday positive divergences I have described in the market, perhaps they try to fill today's downside gap, perhaps its less ambitious than that.
The 1 min intraday chart was in line with price action and is now leading positive a bit, so as I mentioned, we may see some gap filling Monday or even some upside action in to the close, this appears to be confirming that upside in to the close.
So to put it all in order, we have a near term (through the close, perhaps Monday) divergence that suggests some gap filling from today's move down or some backing and filling. The pullback in the market still looks like the most probable outcome, there are several charts suggesting this could be a sharp pullback, it may even be enough to create some new lows in several key stocks and bring the bears back in to the market. AFter that pullback is complete, I believe we have the signals on the right timeframe to resume a move up and finally effect a real short squeeze. Should we get that short squeeze we'll be looking for distribution in to the move up and looking to add or establish primary trend short positions, by that time, as far as I can see now, we should start to resume the primary move to the downside.
No comments:
Post a Comment