When the $AAPL Falls, run away from the tree – December 1, 2021
AAPL
This is Scott with your Chart of the Day. I want to talk about Apple ( NASDAQ: AAPL ). Apple ( NASDAQ: AAPL ) has been on a massive run as of late. You can see can this really nice move off of the 50-day moving average and a 14 percent gain in about 20-days or so. So not a bad move here from one of the big tech leaders.
One thing that made me a little cautious on the market recently is the fact that yesterday, for example, the market looked terrible but Apple ( NASDAQ: AAPL ) ran and ran really nicely and did it on good volume. I saw this really funny tweet that I think encompasses the market yesterday. It was a heat map, obviously, everything is red but for some reason, people are piling into Apple ( NASDAQ: AAPL ) stock.
Now, I think that could be, kind of, end-of-month positioning that we saw yesterday but it was just notable that everything is weak except this one stock. And so today, what did we get? We got a higher open, a little bit of a run to the upside, and then a flush down and a close near the lows on higher than average volume. Yesterday, the only stock that was really performing well in the market is starting to show a little weakness today.
That tells me just to be extra cautious overall because one of the strongest stocks in the market is now starting to follow the market lower, although, we know that this is technically still high above the moving averages here. But this to me just looks like a tired stock that people were taking profits in. And even if one of the strong stocks starts to show weakness, I want to get protective, overall, in my portfolio.
And so this, in my opinion, is something that you have got to watch out for. When the strong stocks in the market, the ones that have been outperforming start following the market lower, do not be afraid to take profits in that stock. If you are a swing trader you will take more profits. If you are a long-term position holder you are probably looking at the weekly chart here and saying, you know, this still looks fine to me.
So just know what your time frame is. But I pay attention to the daily chart and really watch for those signals of strength and weakness in terms of how exposed I should be in the market. And so if a big stock like Apple ( NASDAQ: AAPL ) is falling from the tree, maybe it’s time to run away to cash.
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