Friday, October 26, 2012

AAPL Not in a Place to Scare Shorts

In fact it's in a place shorts would be likely to pile on, I'll show you. There's also an interesting candle that looks like it will hold in to the close.

 There was some volume as AAPL crossed the $600 level as well as the intraday support level, most likely new or short term shorts covering.

 It's at the resistance of the triangle that shorts are divided from happy to scared, right below the resistance area they are happy as it appears resistance was tested and failed offering a better short entry, this is very old school Technical Analysis, as you saw with AMZN today, these levels are largely shaken out by moving price through the level and getting shorts to cover.

 I'm not sure if this daily closing candle holds up, but if it does, it's a reversal hammer on volume which makes it a high probability reversal signal.

 The short term 1 min chart shows a negative divergence at resistance in AAPL, this may be retail shorts, it may be for show to gain their confidence on a failed test.

 The 3 min chart looks nearly the mirror opposite of price today, that is a divergence and a positive one for AAPL as the 3 min chart saw the highest move at the lowest move in AAPL, there was plenty of volume/supply to accumulate at very favorable prices if you are running a shakeout move to the upside.

The 5 min chart is similar in its divergence.

There are several different ways this could play out Monday, perhaps  early weakness locking in more shorts, perhaps a gap up through resistance causing a short covering move off the open. All I can tell you is the probabilities with these positive divergences at break down/head fake areas are very high for an upside reversal.

No comments: