Thinking about trading Apple (AAPL)? Check the technicals first…and then trade! (March 28, 2017)
I want to look at Apple ( NASDAQ:AAPL ) here, and this is why: I think this stock is going higher. This is the kind of thing that we have been waiting for, for a while. I don’t know of too many people who are really bearish on Apple ( NASDAQ:AAPL ). I might have been the closet one and that was strictly for technical reasons, chart reasons, but now I am flipping around and you can see why in this chart.
First of all just as a general thing, I wish this squeeze was occurring closer to 135.00, just down further because it has had this big move and then it hasn’t really pulled back. You like to see these things kind of drift sideways to down a little bit, really kind of conforming to William O’Neil’s classic cup and handle pattern. But if you look at this on the weekly chart it looks pretty close, only on a much longer-term basis. You can see this cup here and then I guess the handle would be this little thing here. It is at a little bit higher high relative to this one, and that is actually a good thing too. So the market is trending higher. This stock is breaking out just today; we have got this weekly chart that shows the high of the week is 144.00, that was just today.
So this would be my deal on this: I bought some calls on this today because call options are pretty cheap. They also then limit my downside, I know exactly what I am risking. But the thing is, these options are so liquid, if you want some you can buy them, you don’t have to worry about getting clipped. And so my suggestion on this would be tomorrow, if this is still up, know that 145.00, just because it is an even number, that would kind of be resistance for Apple ( NASDAQ:AAPL ). But know that ultimately that this stock is moving higher; the technicals say so. JP Morgan says so, and JP Morgan is big enough to actually control the technicals through their calls.
So I would suggest buying this, get long this stock even though it is extended, if you have a longer time horizon. And then as long as the stock stays above the 50-day moving average you are good to go. And by the way, they don’t report earnings for a month, so that gives the stock plenty of time to move higher from here. I think this will be a good trade.