"Taking a closer look, you have a pretty clear resistance "area" around the psychological magnet (whole number) of $115 which just adds to the case for a head fake move. If we went no further than this chart and didn't have any idea where the probabilities were as far as AAPL perhaps being accumulated for a much larger run higher or distributed and an expected move lower, the fact would still remain that Technical Traders are predictable in their actions when faced with certain situations like a clearly defined range and the more popular the stock, the higher the probability that some kind of head fake move will take place based on the range and using the predictability of Technical traders' reactions against them.
This is a longer term look using multiple timeframe analysis, however if you look within the leading negative divegrence, you have a weaker, but still important relative positive divegrence at an area that also forms a "W" base and is in the range which draws a lot of attention and is ripe for a head fake move. Overall it would seem to me that there's a definitive change in these very long term charts toward the negative, however that head fake move above the range would be very enticing to me if I were pushing the buttons on short term price action. This "could" also set up a nice short trade that comes to you, of course we'd want to see evidence that there's distribution in to a move above the range, but that range sitting there is such a popular stock looks like a very high probability set up."
While we saw some short term charts move around a little today, the gist of today's post, AAPL Update-Earnings, was...
"There have been some changes in some of the charts since yesterday. I still would prefer to sit back, let AAPL do what it's going to do on earnings and if there's a head fake move above the range, use that to our advantage to get good positioning on AAPL.
Otherwise here are the charts that have some interesting information today, mostly negative, but not within the timeframe (6 hours) that my head fake theory was based on, no movement there....The 15 min chart and range with positives at the l;last 2 bases, the current negative is not huge and as I said yesterday, I suspect it's there to prevent a premature head fake over the psychological $115 level....I still like AAPL as a long term core short, but in this case, I'd rather let the dust clear and plan the trade based on whether we get a head fake move which should be able to be confirmed."
And on AAPL's top and bottom line beat in After-hours, I bet you can guess exactly what happened (even though the conference call is yet to take place)...
Those two blue hash marks are the bid/ask for AAPL in after-hours, you should be able to see the red trendline defining the range and AAPL's price sitting right above the range.
This is a concept so strong and so common, you could almost bet on it without any other chart confirmation. Now it's a matter of looking for the confirmation of a head fake move. Why might we have one with AAPL beating so handily... Well there's a lot of concern about their new mega market, China and foreign currencies vs. the $USD, not helpful.
Remember, Wall St. is not about what you did, it's about the PERCEPTION of what you'll do and if that perception is not "They'll do even better the next quarter" with $USD acting as a head wind, then there's no reasons not to sell AAPL in to price strength which is facilitated by the technical concepts that are so predictable among technical traders.
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