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Option Millionaires was started in February 2008 to provide traders with information about option trading. Led by three career option traders, whose pseudonyms are JimmyBob, UraniumPintoBeans, and Vantillian, they started one of the most popular option trading communities on the web. Now, Option... More
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  • Apple Looking Exhausted, But Bullish Until October 23rd! 0 comments
    Oct 1, 2012 3:34 PM | about stocks: AAPL

    By Christopher Diodato

    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.

    (click to enlarge)

    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.

    (click to enlarge)

    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!

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: AAPL
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