Apple Looking Exhausted, But Still Bullish!

Every time I see a commentator on CNBC talking about Apple, they always profess that the stock is invincible and every time the stock declines, there is always enough demand to create another rally.  The reason that the technicians cite is that volume always increases right at the lows, which represents accumulation.  Here's a chart of Apple, with the volume bars near minor bottoms highlighted in blue.

http://www.tradersbase.com/wp-content/uploads/2012/10/AAPL-Spikes.png

Now, as we travel downward toward support again, we see that volume is increasing, but price is not moving.  Even though, as I mentioned in my last newsletter, Apple is forming a bearish head and shoulders, it does not look like it will break down, yet.

We know that volume is increasing and price has stopped declining, so that should make us slightly bullish.  Also, momentum is showing strong bullish divergences.  The chart is below.

http://www.tradersbase.com/wp-content/uploads/2012/10/AAPL-mom-divergence.png

Of course, attempting to accomplish the so-called "impossible," my Gann analysis calls for the last top to occur on October 23rd, a few days before the broad market tops as a whole.  So, now is not the time to short Apple.  One more rally is in the works!

Profile photo of MetroTraderMetrotrader (D) is one of the few practicing CMTs (Chartered Market Technicians) in the United States . The CMT certifies his knowledge of market timing and risk management approaches. He tends to look for broad market moves and take advantage of them with index funds. The strategy he principally uses is mostly quantitative, and, tested, and has avoided or capitalized on every major recession since the 1940s. He says the best way to make money is to avoid losing it in the first place.

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