AAPL, Long above $119, Short under $109!
Apple stock has been extremely interesting recently. We saw it reach a 2T market cap, split 4-1, reach new highs day after day and most recently drop 20% from an all-time high. All in less than a month.
So the real question is, where can Apple go from here? There are two scenarios. It's difficult to say Apple will bottom out here or it will for sure keep dropping. It has dropped quite a bit but there is the possibility for an even bigger spill to correct the markets a little better to a more real valuation.
Apple's bear case is a little stronger than the bull. We have the September rebalance to look for. We also have not seen the complete rebalance of the US equity indices. based on technicals we have seen that Apple has managed to close it's downside gap and that typically happens before a slight spill. The real tell of the downside on Apple is the massive consolidation that we saw earlier in the summer between $108 and $115. There is a huge volume block there based on the volume profile. If we manage to hold that out as we have seen very recently, we are most likely going to make a push back to all-time highs.
However if that pivotal level and red box break, we're going to see a downward push most likely into the 200-day moving average and potentially in the prior broken all-time high that was an area of consolidation. The 200-day moving average is first at $108, so that becomes an easy test of a level. The more aggressive bear level is if we break that consolidation period and we tumbled back into the prior broken high at $98-$99. This would be the real pullback and rightfully so an area to stall. There is massive volume there and it was a prior top, so that means there would be a lot of long money interest should that level be tested.
This is for educational purposes, not investment advice. All traders are responsible for their actions in the markets. Trading involves substantial risk, I would recommend being aware of that risk and being well educated on the matters before proceeding.
So the real question is, where can Apple go from here? There are two scenarios. It's difficult to say Apple will bottom out here or it will for sure keep dropping. It has dropped quite a bit but there is the possibility for an even bigger spill to correct the markets a little better to a more real valuation.
Apple's bear case is a little stronger than the bull. We have the September rebalance to look for. We also have not seen the complete rebalance of the US equity indices. based on technicals we have seen that Apple has managed to close it's downside gap and that typically happens before a slight spill. The real tell of the downside on Apple is the massive consolidation that we saw earlier in the summer between $108 and $115. There is a huge volume block there based on the volume profile. If we manage to hold that out as we have seen very recently, we are most likely going to make a push back to all-time highs.
However if that pivotal level and red box break, we're going to see a downward push most likely into the 200-day moving average and potentially in the prior broken all-time high that was an area of consolidation. The 200-day moving average is first at $108, so that becomes an easy test of a level. The more aggressive bear level is if we break that consolidation period and we tumbled back into the prior broken high at $98-$99. This would be the real pullback and rightfully so an area to stall. There is massive volume there and it was a prior top, so that means there would be a lot of long money interest should that level be tested.
This is for educational purposes, not investment advice. All traders are responsible for their actions in the markets. Trading involves substantial risk, I would recommend being aware of that risk and being well educated on the matters before proceeding.
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