As a follow-up to yesterday’s End of the Run for AAPL? post, today looks to be a no win day for AAPL. With just over an hour to go in the trading day, AAPL is almost certain to close the trading session with one of two options, both bearish from a technical perspective. Barring some phenomenal stick save rally into the close to finish above yesterday’s highs, Apple will, at best, have completed an inside day candlestick formation today. An inside day is a candlestick formation that occurs when the entire daily price range for a given security falls within the price range of the previous day. When found near the end of a prolonged uptrend, an inside day may suggest that the rally is getting exhausted and is likely to reverse. At worst, AAPL will move or close below the bottom of yesterday’s bearish engulfing candlestick, adding further validation/confirmation to that one-day bearish reversal candlestick pattern.
I’ve decided not to add AAPL as an Active Short Trade at this time as I believe that there are numerous stocks offering much better profit potential and risk/reward profiles on the short side at this time. I will, however, continue to update any significant technical developments on AAPL due to its large weighting in the $SPX & $NDX as well as the fact that AAPL is one of the most widely held & most commonly traded stocks. If one were inclined to take a short position in AAPL, an entry around current levels with a stop somewhat above yesterday’s highs would certainly seem objective. AAPL still has decent uptrend line support just below as well and as such, one might prefer to wait for a solid break below that level before establishing or adding to a short position. That trendline can be viewed on the Live AAPL Chart by clicking here (you may want to change the time period to zoom in once this 2-year chart is opened). The 493-496.50 looks to be the first decent support/target area, should AAPL move lower from here.