AAPL Cup-And-Handle And More

Mar. 28, 2014 2:03 PM ETAAPL, JJCTF, BAC
Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Long/Short Equity, Contrarian, Technical Analysis, Gold & Precious Metals

Contributor Since 2011

Why “Playing the Ponzi”? I view the entire monetary and financial system as something of a Ponzi scheme. Starting with currency that is created as debt, and running straight through a global economic model that is based on infinite growth in a finite world. This won’t end well. I’d go a step further and suggest that our materialistic value and belief system is another way in which we’re building castles on sand… but I digress. I view our financial markets as a casino, and frankly, I like gambling. I prefer technical analysis to fundamental analysis because I find the “behavioral” side of investing more interesting than longer term projections based on financial/numerical analysis. Pictures make more sense to me than numbers. I'm dumb like that. As for an investing “philosophy”, I believe in small/micro-caps. I believe the market rewards growth above all else, and growth is easiest (to spot, at least) and most explosive when a company is young and small. As a company matures, its growth inevitably slows. Microcap stocks tend to be extremely volatile so I believe strongly in taking profits on the way up (or exiting quickly if the entry point proves poor). I attempt to buy stocks that are pulling back in the midst of a longer term uptrend. I hold anywhere from hours to years, but usually in the 3-6 month range. I am an amateur investment enthusiast, who has committed every investing cardinal sin at some point - and sadly, sometimes still do. Between first entering the markets in 1999, and 2002, I lost 90% of my seed money. Since then, I’ve found an approach that works reasonably well for me. My average return has been about 20% annually since 2003.

A couple of miscellaneous charts: two bearish and one bullish. First, a bullish setup for a company I dislike: Apple. But personal distaste aside, AAPL has an interesting looking chart over the last year. It looks a lot like a 16 month cup-and-handle. A breakout from this setup would be awfully bullish.

Bank of America (BAC) has a far less lovely setup. A rising wedge over the last two-plus years puts BAC at risk of significant downside. Support has not yet broken, but the setup looks distinctly bearish.

Copper (JJC) has broken below the support of a multi-year bearish descending triangle. This week, it rallied back to the area of the breakdown. It will be interesting to see how things develop from here. The chart could also read as a head-and-shoulders, or even possibly as a bullish falling wedge. I think most of the readings suggest significant downside, but we shall see.

Disclosure: I have no positions in any stocks mentioned, but may initiate a short position in BAC over the next 72 hours.

Recommended For You


To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.