9/19/2011 7:20:33 PM
Keystone Speculator
Posts: 32
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AAPL Weekly Chart:
Despite the broad markets moving lower today, Apple jumps higher. The recent recovery rally is led by traders buying large cap tech with both hands. The iPad is selling like hotcakes and that will continue forever, right? The fact that folks are cutting back on monthly bills like cable, Internet, etc..., as well as buying electronics in general, does not matter when it comes to Apple, right? This chart say wrong.
Rising wedge, overbot conditions and negative divergence, AAPL is going to get spanked down from here. Keystone's 80-20 rule says when a ticker reaches an 80 level it typically prints the 20 level, thus, once 380 was pierced, 420 is in play, so for 8 or 10 bucks or so of upside, it is not worth it. The MACD and money flow over the last couple months (green lines) gives Apple a slight benefit of the doubt that as price falls it may provide a little M top action, but this chart is cooked.
Volume continues to trial off since the crash in August and even with this higher high today volume is still lower than four other large volume prints over the last two years. Take the money if you rode this bad boy the whole way, if not in it now, do not believe the hype, in a month or two you will look back and understand why. Projection is price topping now, sideways to sideways down for the weeks and months ahead.
AAPL Daily Chart:
The weekly chart is negatively diverged now, let's take a look at the daily chart. Just as ugly with the blue lines showing negative divergence across the board. Down she will go. Note the red circles. See how price moved up and the indicators also printed higher highs. That tells you that price wants to come back up for another higher high. Well, now it did. At this juncture you reassess and the blue lines tell the tale; negative divergence spank down coming. A long and strong stock would keep printing higher highs for the indicators.
When a price move occurs with such force and momo, however, price may see a little M top action as it reverses but the writign is on the wall. The analysts are in full blown pump mode now, telling Joe Sucka to jump in now before it's too late--and the pumper just so happens to have some shares he can give you, since he is such a nice guy and all. Like P.T. Barnum said, there is a sucka born every minute.
Keystone's 80-20 rule allows a move to 412-430, this is the top, then down to the 395 gap fill to start, then lower. Price will roll over as we move along, projection is sideways to sideways down for the weeks and months ahead. These daily and weekly AAPL charts forecast that the iPads, Mac's and other products are not flying off the shelves as the estimates say and, perhaps a delayed reaction to Steves Jobs lesser role is on tap.
The Keystone Speculator.
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