AAPL Update

By now we all pretty much know the story of AAPL's earnings, but there are some interesting things to learn from it and there are some interesting preliminary signals coming from AAPL.

First in yesterday's AAPL post I showed you how AAPL's bull flag had no accumulation in it and in fact looked perfectly engineered to attract bulls as it is a bullish consolidation pattern, SEE UPDATE HERE

In fact, I said in bold,

"so needless to say I find the appearance of a bull flag in the most watched stock in the market, on the day of earnings to be a little suspicious "


As for scenarios based on the bull flag, there were several, but they all had 1 theme in common, that the bull flag has a false pattern or  head fake pattern to set bulls up for a fall. Here were some examples of how I thought it might play out:


"First of all, AAPL has a VERY obvious bullish bull flag in place right now, for technical traders, this suggests AAPL is about to break out to the upside and put in the next leg higher which is usually about the same distance as the height of the flag pole (from about $565 to $618/$620). Volume is not perfect or really even close to correct for a bull flag, but you can bet AAPL longs are transfixed on this bull flag. We know from experience that if there were to be a downside reversal in AAPL, we'd expect a pattern like this to show up and about 80% of the time we'd have some variation of a head fake move, whether that be a quick break above the flag followed by a move below the flag or whether it be a longer break above the flag pulling in more longs and then a drop below the flag putting them at a loss, a new high even or just a total failure of the flag with a move below the flag tomorrow, we ALMOST ALWAYS see some head fake move"


Here are the current charts, there may even be a long trade in there.

 Here's the bull flag, technical traders would be buying this price pattern on expectations of a breakout and a new leg up, instead we got a break below trapping all longs since the flag was formed, however I'm wondering if this too may not be a head fake move with some upside coming as longs sell and shorts enter, there's plenty of supply to be accumulated at cheap prices.

 I may not have thought that way about AAPL if I had not seen these charts, the 1 min very positive on today's gap down.

 The 2 min

 The 3 min

 Even the 5 min is leading positive

There's even some movement all the way out to 15 minutes.


I'd like to see AAPL pullback with even stronger positive divergences and I'd consider it for a Call position. It's definitely interesting, even if you look just at what has occurred already.