Stock Trading Predictions & Technical Analysis: AAPL - Breaks The Major Uptrend After Nearly 10 Months!

Monday, December 7, 2009

AAPL - Breaks The Major Uptrend After Nearly 10 Months!

AAPL - WAIT (STRONG SELL SIGNAL happened on Friday)

After nearly 10 months of steadily and strongly trending up over its 50 day MA, AAPL has finally broken the trend on Friday and given us a STRONG SELL SIGNAL. AAPL has continued lower today trading for a 2nd straight session below the 50 day MA, which now strengthens the possibility of seeing the start of a major down trend. As things stand right now this is still a minor down trend but the fact that the 50 day MA was broken after 10 months is very significant and there is more chance now of seeing AAPL heading lower as it breaks down through support levels. AAPL's next support levels stand around $187, $180, $177, $173, $160 and $152 where its 200 day MA stands. If you were long AAPL I would suggest closing your position and take your profits. There may be more of an opportunity on the short side for the long term (monthly basis). AAPL's Stochastic is in very oversold territory just over 6, which could mean that you may see a few bounces here and there, but as long as AAPL stays below the the 50 day MA and the longer it does the less chance it gives AAPL to reverse back to its major up trend. I believe last week I mentioned AAPL was a STRONG HOLD, and this was assuming AAPL would bounce back up its 50 day MA which it didn't. That is why it is always important not to try to predict moves or assume a support level will hold. You must always wait for a confirmation, or in this case to wait and see if it bounces back up the 50 day MA which it didn't. AAPL may be a good candidate for a Short Position now. It is possible to see attempts in the coming days to go back up over the 50 day MA around $195, but the longer AAPL trades below it the less chance it has to cross back up. AAPL is currently at a critical support level around $187, that if broken could send it easily back to $180 which would then reduce even more the chances of seeing AAPL bounce back up over the 50 day MA. Another possible scenario for AAPL is to see it cross back up over the 50 day MA while failing to go over $205, which at this time could mean that AAPL is trading in a sideways trend, ranging between $187 and $205.

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TECHNICAL INDICATORS

BUY SIGNAL: Indicates the possibility of the start of a new up trend or the continuation of the current up trend. This signal may be often given in the early stages of a potential new up trend that was preceded by a down or sideways trend. Such signals do not always succeed and may fail at time.

BUY: Indicates that the current up trend is already in motion and a BUY SIGNAL was already given earlier. A BUY does not necessarily indicate that the stock will continue higher from here, but simply that the stock is trending up. The further into the trend you decide to take a long position, the more risk you have of seeing it reverse back down sooner rather than later.

STRONG BUY SIGNAL: Indicates a stronger, more significant and reliable signal than a BUY SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG BUY: Indicates that the current up trend is already in motion and that STRONG BUY SIGNAL was already given.

SELL SIGNAL: Indicates the possibility of the start of a new down trend or the continuation of the current down trend. This signal may be often given in the early stages of a potential new down trend that was preceded by an up or sideways trend. Such signals do not always succeed and may fail at time.

SELL: Indicates that the current down trend is already in motion and a SELL SIGNAL was already given earlier. A SELL does not necessarily indicate that the stock will continue lower from here, but simply that the stock is trending down. The further into the trend you decide to sell a position, the more risk you have of seeing it reverse back up.

STRONG SELL SIGNAL: Indicates a stronger, more significant and reliable signal than a SELL SIGNAL which usually has less chance of failing. Such signals do not always succeed and may fail at time.

STRONG SELL: Indicates that the current down trend is already in motion and that STRONG SELL SIGNAL was already given.

HOLD: Indicates that traders who already hold this stock, should hold on as long as the trend persists. This signal is usually given during an up trend for which it would be considered too risky to take a long position at this point.

STRONG HOLD: Indicates that the current trend has been in motion for a while and rarely deviated away from the trend. Although the stock may continue higher, there may not be enough potential up side to trigger a BUY SIGNAL. This type of indicator usually means that the stock has very strong support levels which may have been tested but not broken.

WAIT: Usually given during a sideways trend for which we are waiting for a move that would trigger a BUY SIGNAL or SELL SIGNAL. This could also indicate uncertainty and the risk that would be taken if you were to take a long position at the current level. Taking a long position after giving a WAIT indicator is considered a gamble.