AAPL Follow Up #2

Earlier today I posted AAPL, mostly the bearish perspective and how we can short in to price strength because the under;lying trade is very weak, but I also went with a December $520 call at the end  of the day; these are two VERY different trades. 

The short position should be entered in to on some strength and should be good for something along the lines of a swing trade, maybe more, but you may recall the 60 min chart just isn't weak enough right now for me to consider this a core short.

By the end of the day, the two candidates that I liked as shorts using short term price strength to enter (PCLN and AAPL), both were looking really interesting as VERY speculative, short term positions. Because they are so short term in duration, even though the signals are good, the profit potential is reduced so in this kind of situation I believe in using the right tool for the job and in this case, Call options. I'd usually go with January by this time of the month, but since this is expected to be a very near term position, December fit well.

 This 10 min chart is pretty much the important key to an AAPL short which I think can be an AAPL equity short, in other words, I think you can short the stock and not have to go with options, although the additional leverage of options can be helpful if market conditions are right and you have the risk tolerance for options or are comfortable with them.

 This is the intraday 1 min chart today, not only did the 1 min hold AAPL in place and create that  lateral price action I was looking for today ever since late yesterday and last night.

The leading positive divergence is not needed to hold AAPL in place so when I see a leading divegrence like this, it tells me there's an increase in short term underlying action toward accumulation.

 I look for migration of the divergence, that means if the divergence is strong enough it will show up on longer charts, this is a 3 min chart and we see the positive divegrence made it there today too.

This is really important in the decision for entering the options, the intraday 5 min chart saw a lot of leading positive action today, this isn't the largest intraday  action I've seen, but it is very respectable.

 Even looking at the 10-min chart on an intraday basis, we can see the 5 min chart started to migrate over to the 10 min chart, there's no way that the 5 min chart will undo the damage seen on the 10 min chart at the top, but for a short term move, this is good.

So we can hitch-hike a ride on the way up and close the calls, then enter the AAPL short once we've reached our upside destination.

For those who want to follow the long term trend, this is my Trend Channel, it automatically self-adjusts to the volatility of each individual stock unlike envelope channels or others.

You can see where the short trend was and where it was stopped out and where the long trend is and where it is stopped out, right now at 4488, but the Trend Channel will continue to lock in gains so tomorrow the stop may be a bit higher, feel free to contact me for updated stops.