Stock Update: AAPL Where to Now? A Long Term View Part 3

Right. We now come to the daily chart and again we take note of where the support lines were in the medium term and then set line for where we want to watch for short term support which I have defined as $292. We observe that volume has dropped off dramatically in the last 4 trading sessions and the MACD has turned south. There was a shooting star at the $318 level (Mon Oct 18) followed by a plunge down the next day (Tue Oct 19) undoubtedly due to profit taking and since then indecision to the negative side with all the red candles.

To me this says to go short for a while until participants decide what direction they want to go in. This will mean that you need to keep your finger on the trigger ready to close your short position at any time to prevent losses from growing.

Disclaimers
1. This article is not intended to provide investment advice and is an expression of my own opinion. Readers act upon this information at their own risk.

Stock Update: AAPL Where to Now? A Long Term View Part 2

In my last post, we started to see that the long term view of AAPL looks bearish and raised the question whether we are due for a fall in AAPL.

With this weekly chart over a 2 year period, I have identified 3 support levels - $191 (long term support), $270 (medium term support #1) and $240 (medium term support #2). Since the end of August, AAPL has moved up nicely in price and in volume. This is a good sign that participants are there to support the price in increasing numbers.

You will however note that the candles are getting a little extended beyond the Bollinger Bands the last 2 weeks and we shall see whether this week ends up strong or weak to turn the MACD down where we may see some downward action, consolidation before resuming the uptrend, or sidewards action like we saw between April - September. Anything is possible.

Should we go short at this time? Take some profits off the table?

Disclaimers
1. This article is not intended to provide investment advice and is an expression of my own opinion. Readers act upon this information at their own risk.

Stock Update: AAPL Where to Now? A Long Term View Part 1

What an amazing ride it has been for Apple since my last entry the end of June where we were at around $260 and looking at a pull back which is what we saw happen ~$240 early July and even lower in August to ~$236 and not breaking out beyond $263 until September. During this time, iPads were being released around the world driving up earnings and giving positive momentum to the stock sending it above $300. What is next in store as we head into the end of the year with U.S. mid-term elections taking some of the focus and then onto the holiday season?



It may be a good time to take a breather and look at the bigger picture in terms of a monthly 5 year chart and look at what has been going on.

Firstly let's look at volumes since 2007. Interesting that the monthly volumes have been very light in 2009 and 2010 compared to prior years with the highest number traded in May 2010 of just under 675 million shares. Nevertheless, the stock has climbed higher. This is a comment often heard in the media and the concern here is that fewer investors are chasing the stock higher and is an issue around a lower diversification the investor base which may lead to an increase in risk for those participating as there are fewer opinions out there than there were before. However, it could be that we are getting a better quality of participants and fewer 'speculators' in the markets by way of hedge and/or quant funds which exited the markets due to the financial crisis. What we therefore are seeing in the lower volumes are more "normal" trading volumes which we say pre-2005.

Still on volume, what we are also seeing is a bearish divergence with volume falling while prices rise. Is it possible that AAPL is ready for a fall?

Disclaimers
1. This article is not intended to provide investment advice and is an expression of my own opinion. Readers act upon this information at their own risk.