AAPL Trade Idea Update

This is an update to one of several posts for an AAPL trade set up, the last was Dec. 5th, AAPL Trade Set-Up Update, this is from 12/3 AAPL Trade Idea Follow Up, and the original idea from 12/2, AAPL Trade Set-up

I didn't get the set-up I was hoping for, but as AAPL progressed, the second place set up, increasingly negative divergences started to take over.

I'd like to see AAPL on a bit more price strength and just a bit more 3C weakness to enter as a short, but if you are looking at the big picture, you may find it attractive here with a bit of a wider stop or maybe even a partial entry, filling out the rest either on slightly higher prices or worsening divergences.

 This is what I was hoping for, a head fake move above the symmetrical triangle which technical traders would have bought on a breakout as the price pattern carries no bullish or bearish bias like the right angle triangles (descending and ascending), but it does carry a bias according to the preceding trend in to the triangle which was up. Since we already had negative divergences, a head fake above the apex of the triangle would have been a fantastic short sale entry, we did get a small move, but I was really looking for a bit more.

The 60 min chart shows AAPL in line with an uptrend at the green arrow (trade long /stay long or out-but don't short there) and then an increasingly negative 3C divegrence, which is the motive behind the trade set up with a head fake move being the entry.

As time passed, some of the shorter to intermediate term divergences got worse and I considered AAPL as a short based on those, but still wanted to see more considering I wasn't getting a price / risk concession on a head fake move.

This is the 5 min chart, you can see how it clearly deteriorated with distribution and how AAPL, the most heavily weighted stock on the NASDAQ 100 was used today to ramp the QQQ/NDX.

This 5 min chart is still in a leading position, but shorter negative timeframes are migrating toward the 5 min and it should go negative, but until it does, I', willing to be patient and if it does make a little move higher and the 5 min goes negative, I'd consider that an entry. For longer term traders, you might consider it a short here and now and I'll show you why based on the Trend Channel.

 As mentioned above, short term timeframes are falling apart like the intraday 1 min which is leading negative.

The 2 min trend, with about in line today.

A closer look shows it is seeing migration from the 1 min chart and starting to lead negative. I'd like to see this hit the 5 min chart if price moves higher or stays in the area.

 The 3 min chart with the same early positive divegrence for a gap fill we see market wide and in all of the averages.

Again, there's the start of negative migration and as the 3 min looks worse, the 5 min will start to go negative which is about my threshold for a trade (short).

However, longer term traders may want to consider the Trend Channel which stopped out on a daily basis, meaning the trend from the October lows. There's often some additional volatility right after a TC stop out, but the trend, the easy money is done.

As for the 2014 trend, this 3 day Trend Channel held all gains without a signle stop, but right now it's close to a stop out for the entire 2014 trend below $108 on a closing basis. Should that occur, it is very likely AAPL starts a new trend to the downside making it an attractive longer term short sale position.

It just depends on your time horizon.

I'll keep up with AAPL.