AAPL Trade Idea Follow Up

Lots of posts for AAPL this week thus far.

We started with Monday's, AAPL Update which showed AAPL and a potential set up, it was and still is far from my favorite trade because it is transitioning like MFT did from a growth stock to more of an old blue chip dividend type stock, just look back at the last 20 years of MSFT history and you'll see the same story being played out in AAPL, from a monster growth story to a Blue Chip, more defensive type of asset.

The trade set-up was based in Wednesday, November 26th's triangle which looked like this as of Monday's post.

Given the profit potential for AAPL as it transitions, I wanted a better entry for a short above the triangle, which is or was probably the NDX's best hope for some better relative performance as you could see from the A.M update this morning, the NASDAQ 100 futures did NOT have the same or any positive divegrence which is why I said I expected them to be the laggard yesterday and why I continued to feel like their best hope was an AAPL bounce which would also set up a better AAPL short entry with lower risk, this has been talked about at length (Index weighting and AAPL's weight on the NDX).

However AAPL itself never developed much of a divergence either. Then came yesterday's early AAPL update, AAPL Trade Set-up and by the end of the day in the Market Update AAPL was already seeing negative divergences in the 2 and 3 minute timeframes migrating or gaining strength and moving through longer intraday timeframes which could meet up with the intermediate which would be the only reason I'd consider an AAPL short. With Tech being the laggard among the S&P sectors yesterday, last night I mentioned the possibility of it rotating in today, maybe helping the QQQ, but since late yesterday...

As of this morning, things are not looking any better for AAPL despite its price gain/gap up...

 It is the 10-15 min AAPL charts that would cause me to even consider an AAPL short, but on short term price strength that can be shorted in to with deteriorating 3C charts.

This is the 2 min chart that went negative yesterday. At #1 we have last week's late weakness in 3C causing the Monday morning decline and a very early (10-a.m. or so) 1-day short term oversold event at the large volume spike (#2). There's a very slight, weak positive divergence there and that's about it. Since at #3 and #4 AAPL has seen deterioration in the short term timing 3C charts, but not the price gain ABOVE the triangle on the first chart above this one.

However "IF" AAPL's charts keep falling apart at this pace, then a swing short may be justified even without the move above the triangle which I still hope we see, but don't have much reason to believe in other than Tech's poor performance yesterday and the often seen rotation the next day.

AAPL's 3 min chart also saw a building negative divgernece yesterday as the 2 min grew stronger and migrated to a 3 min chart.

This morning...

AAPL's 5 min chart is now starting to lead negative. This will make it quite hard for AAPL to make much upside headway unless it is specifically ramped as other levers fail , to goose the Q's higher.

 It is the intermediate 10 min chart above and 15 min chart below that would even cause me to consider an AAPL short. They go from in line or price/trend confirmation at the green arrow to negative divergences late last week leading to Monday morning's decline and since, an even deeper leading negative divegrence so the 2, 3, and 5 min charts are now migrating to the stronger 10 and as you'll see below, 15 min charts.


 While not a screaming short, there's a clear change in character from in line (green) to a couple of negatives on a pretty strong 15 min chart, given the 30 min below...

Also showing a change in character, AAPL may become a short even without the head fake move above the triangle where I think it offers the best short entry. The simple fact is AAPL simply may not make that move. Alternatively, if these charts which were not as weak Monday, which is why I required the better entry higher with less risk, continue to degrade at the pace they are currently, we may have a new reason to short AAPL , a reason that wasn't present Monday and that's the longer charts showing heavier distribution.

I still have upside price alerts set and would still not rule out AAPL being used to ramp the Q's and rotate to Tech, but this is also an interesting development worth keeping our eye on.

Even if you are not interested in trading AAPL short, it is a bellwether so what it does is important.