AAPLTalk, Night Owl Update (8/14/13 Market Close): Lost in (Air)space?

So yep, AAPL trading was kind of wild today in the wake of Carl Icahn’s newly disclosed stake in AAPL.

A range of 493ish-504ish.  Big volume of 27M, though not quite as big as yesterday.  A fight to take out 505 which stopped a bit short at the intraday high, and a close of 498ish, up about nine bucks for the day but still short of 500 and just barely in the middle of the trading range for the day.

Does that tell the whole story?  Is the story one of disappointment, rejection, a cessation of AAPL momentum, the precipice of a sharp retrace if not more thanks to the so far, so fast nature of AAPL’s rally lately?  Let’s see if we can get any other clues from the charts.

aapl-15min-081413close

Starting at the 15-minute chart…kinda looks like yet other really, really nice potential bull flag formation, doesn’t it?  The MACD-h flipped negative, and despite the “downtrend”, AAPL didn’t get anywhere close to revisiting the 493ish intraday low of the day.  When zooming out to a few-day perspective, and just looking at the price action?  Seems like solid micro consolidation.

What’s the hourly say?

aapl-hourly-081413close

Pretty much the same thing, really.  As far as “big picture”, AAPL faltered somewhat in the latter half of the day, but 498 held at day’s end as far as the hour-by-hour candles.  A little weakness, and yet, it doesn’t even look like a descending channel like the one “bracketed” in purple trendlines, which would be considered bullish in the present uptrend context (see also the 15-minute chart).

What do we have then?  I’m a trader, so of course I have my theories.  In case you were curious, I lightened up on risk today, raised some extra cash and am anticipating some kind of pullback, because AAPL has in shockingly short order basically filled the post-earnings gap back in January, using the 505ish intraday low as one metric.  But maybe that’s being a little premature?

AAPL’s trading in contested airspace, and bearish elements (whether actual bears or just profit takers) did keep AAPL from breaking through 505, but the chart is actually pretty uncontroversial.  AAPL is fighting its way up to and hanging around the upper bounds of the 485-505 airspace, and the bears’ “victory” by containing AAPL just under 500 rings rather hollow in context.

More on that dark blue line in a moment.

By the way, what about that potential evening star doji or something?  And are there new levels to look at?  Time to finish the post with a look at the daily chart, as I’ve done lately.

aapl-daily-081413close

It’s true that for this chart, we see something looking like a potential early trouble sign for the rally.  But according to stockcharts.com, the potential reversal pattern known as the “evening (doji or) star formation” essentially involves a power day on “day one”, a doji or gap up candle facing stiff resistance and waning momentum on “day two”, and a “day three” where the stock in question trades below the midpoint of the “day one” candle body.  We have day one in spades; day two requires a bit of creative interpretation for the doji case, since the intraday range was a only-narrow-in-relative-terms ten points; and we’re all waiting anxiously on day three.  Application of evening star theory puts the filled red day three candle target at around 480ish.  I say, let’s keep things simple and give AAPL a bit less benefit of the doubt since AAPL’s currently in a hugely significant action area, and see how well AAPL handles 485 as a early warning indicator of potentially changed micro composure – if we get there anytime soon.

Finally, a quick, humble take on potential levels to add to the watch list.  Aside from the new intraday points of reference of 493.40 (hit twice during the day, apparently!), 498-ish (support), 500 (psychological level/micro action area) and 504-505ish (resistance/one interpretation of the end of the post-earnings gap), there’s also 515 above (dark blue line), which, looking back, served variously as support, resistance, and an action area at several points from around mid-December 2012 through mid-January 2013.

For the first time in several trading sessions, I have no trades that I feel a pressing need to adjust or sell on Thursday, and am mostly looking for active/swing trading opportunities I may be able to hold into Friday and beyond.  Obviously, that’s just li’l ol’ me, and I’m sure more than a few of you have better, more disclipined plans.  Whatever the case, good luck tomorrow as the broader market tries to make up its mind on being more rangebound or finally starting another round of retrace.

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