From the May low in AAPL of $519.95 to the all time high at $705.07 put in near the end of September Apple was higher by 185.12 points. The mid point of that range is $612.51 — this is also the price level I am keeping an eye on in the immediate term into earnings.
I don’t want to trade AAPL overnight on earnings but I believe it will have tremendous volatility ahead of them. I have used a midpoint strategy on AAPL the last few days/weeks very successfully and I will target a $600 test if AAPL moves below $612.51 at the open.
Make sure to especially watch the first 5 minutes of action on AAPL’s level 2. Observe if it goes down right away or up right away? Does it go down but then go up? In the case of the ladder you must remember that AAPL’s first displayed ability for the day was to go down. This sentence is important to understand.
Say AAPL gaps up to $615ish, but then goes to $613 right away only to bounce back towards $615 or higher. The first thing AAPL showed you the ability do from the open, was actually go down. Given the bearish trend recently, and pierces of that $612.51 level twice in the last 3 trading days as long as it stays close I will treat it as a magnet.
What do I mean by this? To me, AAPL needs a break and hold back above $620 in order to get people bullish. As long as AAPL is below $620 too many people (like me) will be thinking about that mid point price (sometimes you see me refer to these prices as “magnets” in chat). Why? Because it is simple, it’s just 50% of the range. 50% is an easy percentage to think about. The best traders do things simply while the rest try to figure it out the complicated way.
AAPL — $613.36
Bias — BEARISH
Time Frame — 48 HOURS
Target — $590-600 ON A BREAK AND INTRADAY HOLD BELOW $612.51
Change of Bias — BREAK AND INTRADAY HOLD ABOVE $620
Change of Bias Target — $630-$640
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- I’m treating AAPL like earnings never came out
- Stockhaven Classroom 10/28/12 (How to prepare for a trading day the night before, Tips on using Level 2 to trade AAPL)
- Further evidence of AAPL’s leadership role
- CNBC pro’s get bearish on AAPL in the midst of major uptrend
- SH @ the bell 1/11/12: Beige book coming out at highest price level since July