boy, i’m stuffed. looks like i did end up eating some crow on that “AAPL down to T1 before a meaningful bounce” call from yesterday but i’ve spit out the feathers and here’s the updated 120 min chart. i added a minor resistance level overhead that AAPL might want to shoot for tomorrow. a couple of things to note here: 1) although AAPL came close, it was unable to take out yesterday’s highs, which from a technical perspective, would have been bullish as that would have printed a bullish engulfing candlestick. however, AAPL was 29 cents shy of sealing the deal on that inherently bullish candlestick pattern. not really a big deal but i thought that i might be worth mentioning. 2) regardless of the stronger than expected bounce today, the current AAPL active short trade is still in the black (profitable) and prices remain comfortably below the broken wedge for now. translation: the near-term technical picture on AAPL is still bearish. of course, tomorrow could be a pivotal day as the broad markets rolled down off key resistance at the highs today and close just below those key levels so things could change rather quickly.
really tough to say what happens next: do we gap above resistance and run once again? do we turn back down and resume the short-term downtrend tomorrow or do we possibly consolidate under these levels for a few days before moving higher or lower? one thing for sure is that as a trader or even a longer-term investor, you should have plan A, plan B and maybe even plan C laid out. for the die-hard bull who’s deeply entrenched in the “buy the dip” mentality, you need to have plan B in place for that inevitable time that will come when the dip just keeps on dipping. likewise, for the perma-bear who’s looking to nail the next big top and ride it down all the way to the bank, just make sure that you have an exit strategy if this is just another launching pad for the next big rally. also don’t forget that the market doesn’t have to only go up or down. the summer doldrums often bring sloppy & choppy, sideways markets. maybe a good time for the long-term investor chock full of blue-chip stocks to read up on the benefits of covered call writing to generate additional income on a stagnant portfolio.
