Did you see AAPL’s breakdown this morning? Here’s an intraday look at how to trade these types o..

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Discussed in this article: Apple Inc. ( $AAPL )


We’re looking at Apple ( NASDAQ:AAPL ). I had mentioned this is no big discovery on my part. Anybody with two eyes, actually even one, could see this. The 50 and the 200-day moving average were crossing over this prior resistance here.

Once broken through, it was also, you could say, support. It was obvious that the stock was in an uptrend, and then they came out with their iPhone that just kind of put everybody to sleep. This stock had some support here. You’re looking at this stock, it’s your understanding that you think this stock is going to hold, so what happens?

It opens up in the morning, let’s use a 5-minute chart, so it opens up in the morning, it’s trading at 461.00. That’s where it opens, so let’s look and see where that is back on the daily chart; 461.00, it’s pretty much okay below the 50 but its at the 200-day moving average. Maybe that’s okay, I don’t want to get shaken out of this stock, right? That’s what you’re thinking.

Okay, so right away though the stock starts moving lower and you’re saying, “You know what? I think this might be a problem. I wonder what everything else is doing?” You know what I don’t really care about? I don’t care what the NASDAQ 100 is doing because Apple’s ( NASDAQ:AAPL ) such a huge component that, that you know it’s going to pretty much be doing the same thing.

But I want to know what the S&P 500’s doing. So again, this is Apple ( NASDAQ:AAPL ), gapped down and kept going. The S&P 500 gapped up, held its gap. Dow Jones Industrial Average gapped up, held its gap, thank you Boeing ( NYSE:BA ), United Technologies ( NYSE:UTX ).

The point is, right away you could see, if you had a sense of the daily chart, where you’re saying, “This is support.” But actually, where is it really? Well, maybe right around 460.00, something like that. Then you’re zooming in intraday and you’re seeing that this stock indeed was holding at 460.00, all the way up until the magical moment in time when it wasn’t. That’s when you sell this stock.

So you would have known, and I’m not talking just about Apple ( NASDAQ:AAPL ) here, I’m trying to help you apply these principles to your current trading. These are the things that you want to be looking at. You look and see which way is the market going? Which way is my stock going? My stock’s going against me and I don’t like that. Let me look and see what the market’s doing, because my stock, “quote” going against me, might just be giving me an opportunity to buy more, or might be telling me it’s time to head for the exits.

So what we saw here, when we compare what’s happening in the Dow, again, forget about the Nasdaq 100, but we saw what was happening in the Dow and the S&P relative to Apple ( NASDAQ:AAPL ), now this thing breaks 460.00, you want to be out in this thing.

So when you see this type up of a trend break, with this type configuration that I’m talking about, just sell now and ask questions later, because you can always buy it back. Happily here, you can buy it back at 440.00, probably, instead of 460.00. So it’s right to sell these weak stocks on days that are really strong; you just want to be out there.

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