AAPLTalk, 4/30/14 Market Close: Third Time Isn’t the Charm as $AAPL Shows More Signs of Overheating

Was there a shooting star sighting on AAPL’s daily chart today?

Of course, a candle is only a type of trailing indicator, not a crystal ball, and there’s nothing bearish about the intermediate timeframe. And I’m the not the type of person who’s qualified to make calls on a stock, much less give anything resembling “advice”. ¹ But never hurts to check the charts to see if more of those bearish trailing indicators show up – and see if over the past couple of days, they’ve been adding up.

Starting with the daily chart today:

aapl-daily-043014close

– Nope, couldn’t quite reclaim the mega-macro trendline today either. Interestingly, the longer AAPL struggles right around that “imaginary” line, the more it validates its existence.

– The potential shooting star candle doesn’t signal “doom”, but it probably shouldn’t be ignored either considering its bearish implications. About that bull flag theory from yesterday, it isn’t invalidated, it just has to be “balanced” against the bearish stuff.

– AAPL closed right around the 589.50-590.25 reference zone I mentioned yesterday. Low of the day appears to be 589.80, so AAPL hasn’t actually broken that micro support level yet. As always, we’ll have to see what happens from here.

– Did AAPL get a bit overextended after its present uptrend, which at 75 points is significantly higher than recent measured moves of around 60 points?

– Remember, for another perspective on the micro-timeframe price action, there’s always the Fibonacci levels as one of many ways to measure composure. Zooming in only on the recent move from 572.55 to 599.43 (a pretty “harsh” way to evaluate the uptrend in progress, I think), AAPL has yet to break the 38.2% retrace level, which stands at around 589.2. Sure, it’s only around a dollar away, but that’s the read as it stands at market close.

Shifting our focus to shorter time frames, starting with the 5-minute chart:

aapl-5min-043014close

– Turns out there was a bull flag trigger from yesterday, just not for the 12 or so points the previous measured move “implied” – more like 7 points. Possibly bearish?

– AAPL looked to be setting up another nice bull flag, but the second attempt at 600 later in the day ended…at 590. Another micro-timeframe-bearish sign that bears are doubtless keeping track of, and adding to their “bear case files”.

– Yes, it’s possible that AAPL actually did more or less reach a prior measured move target, which I mentioned in my 15-min chart notes from the 4/28/14 market close. But a slide of around 10 points just a few hours after the target was reached isn’t exactly the ideal “next move” in a bullish scenario, particularly given the “relative strength” of the indices.

– I’ve squared that area of the 5-min chart just as a head and shoulders pattern watch. We do seem to have the left shoulder and head part of the formation for now – I just threw in a quick potential neckline (green line) for my own reference. If one formed, the measured move would probably be between 8-10 points.

I’ll wrap up with a quick look at the 15-min and hourly charts.

15-min chart:

aapl-15min-043014close

– Another potentially micro-bearish data point. The bull flag is still there, no doubt, even if you measure only from April 28. But AAPL’s currently breaking below the lower Bollinger Band on this timeframe, something it hasn’t done recently. Ironically, a bounce could make bulls the most nervous, especially if AAPL falls short of making new highs – that often ends up in right shoulder formations.

– Might be a couple of other minor support levels at 582-ish and 586-ish.

Finishing up with the hourly chart:

aapl-hourly-043014close

– MACD-h has actually been negative for close to two days despite the higher prices. I guess averaging out a much bigger prior move will do that.

– AAPL’s approaching a “price decision gate” on this timeframe as well. It fell below mid-channel in the last hour, but has yet to resolve one way or the other.

With that 75-point move from last Wednesday, I guess some volatility is to be expected, right? “Will the Apple-Samsung II” verdict have any influence on trading? Hopefully we’ll have a better sense of the state of play by Friday.

See you on the virtual trading floor tomorrow.

 

But “just for fun”, I’m thinking there’s a decent chance of AAPL retracing at least a few more points between now and Friday, which wouldn’t be the end of the world. Of course, I could be and have often been hilariously wrong.

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