Apple Investors Working From the Dregs
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Yesterday (Monday, November 10) morning futures were sparked from world markets being juiced on the China $600 billion plan, and we gapped up. Then the government released more details about the AIG plan, that brings the total to $150 billion! I guess at the outset this all seemed like good news. Well, the markets promptly sold the news as it found a wall of resistance at about 950, and unfortunately there were massive numbers of ready and willing sellers there.
Markets moved steadily down into the close, until we hit the trend line support of the triangle bottoms. Apple (AAPL) found that support in the 94.50 to 95 range, and found it early by mid session, and the Bears tried like hell to compromise that level on four separate occasions. On the last try, with just 15 ,minutes to go in the session, the Bears felt they had done their job of antagonizing the Bulls, let up the pressure by covering their shorts. It also appears of few buyers jumped on board and rode the close into the sunset.
When I say the Bears did their job of antagonizing the Bulls, I meant that it’s a strategy to keep the pressure on near this critical support level. The longer the Bears can apply the pressure, the more frustrated the Bulls will become, with some of them simply giving up. As their numbers decrease, then the greater the chances are that the triangle will live up to its expected outcome and that’s to continue the downtrend.
It’s put up or shut up for the Bulls. We need a Bull reprisal, otherwise we’ll lose this level to the Bears. It almost seems imminent, unless the Bulls can mount a major attack. For AAPL that level appears to be around 94. And we’re almost 2% above that level, so shorting here doesn’t have a great risk reward, as it won’t be given up without a rigorous defense. Besides, the 60 minute charts are showing some strength to the upside, being severely oversold and with positive divergences on the MACD.
If AAPL is the leader of Tech and the proxy for the markets, then now is the time to lead us out of the dregs. Hopefully investors will catch wind of Andy Zaky’s latest analysis, which foretells of blowout Q1 revenue that beats the street numbers by $1.2 billion, and earning by a whopping 36%! That would be a monumental underestimation by Apple analysts if Andy’s non-GAAP analysis is correct! And I have no reason to doubt him as he’s consistently more accurate in forecasting Apple earnings than the high and mighty paid analysts. Check out Andy’s report, he does excellent work and deserves greater recognition by investors.
Well, here’s hoping that big money catches wind of Andy’s work and moves Apple and the markets in the right direction. If we can break this continuation pattern on the indices and on Apple, we have a shot at establishing a solid bottoming base. Also, if we rally here and take out the top of the triangle, we’ll be playing into a very bullish Inverse Head and Shoulders pattern, which I illustrated in my last post-podcast entitled, Apple Investors Struggle with Conflict and Contrast.
Best to stay mostly cash, or play things to the light side here. The technicals indicate a small rally is likely, but it’s best to keep a cool head, watch and learn. If we rally, play it light, look for lot’s of resistance, and stay disciplined, if we rally and break out, then great! If we rally and lag, then get your shorts in gear.
| The Investor in the Wilderness Podcast | |
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November 11, 2008 at 8:19 am
[...] Apple (AAPL) found that support in the 94.50 to 95 range, and found it early by mid session, and ...