Apple Setup to Prove Friday Wrong

I posted on Apple (AAPL) breaking $82 resistance last week as it happened real time, and have called the stock for a move to $86 in my Stock Pick thread on the FIO Stock Forum. Well, after moving as high as $82.60 on Thursday, the stock fell over 2 points on Friday to close at $80.41. There was no news on the stock, and after adding to my position at $81.70 (bought my original position at$75.03), I was pretty ticked off.

Volume claimed the stock as a distribution day, but it wasn’t a heavy distribution day as volume was not above its daily average (You can read my guest article on Volume in the FIO Stock Article Database, here).

Today the stock opened down below $80, and fell to $79.50 before climbing back up above $80 ($79.50 was just a few cents off of the 10 day Moving Average (10 MA). After basing out, the stock started an upward surge about 20 minutes ago at 11:00 AM to claim the black (or being up on the day).

Why this is so critical is because of the volume, which currently is closing in on 8.5 million fast. If Apple can maintain pace and return back to $82 on higher volume than friday, the stock may be set for fireworks tomorrow. Friday traded just over 21 million shares, and I am marking this stock as a bigtime watcher today. Apple has a chance to prove it’s Friday woes wrong, and so far the setup is perfect.

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Related Posts:

• STOCK WATCH: APPLE SHARES
• Apple Breaks $82 Resistance
• Strategic Investing, How to Setup a Profit vs Loss Ratio
• Apple Stumbles Below $85
• Apple Sells Off, Stock Down 2%

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Comment by Ann

2006-10-30 17:47:38

Have you ever heard about Price /Volume negative divergence? That’s what is going on with AAPL. This means that there are less buyers at these price levels and correction to the downside should follow. Check your stockastic, RSI and MACD to confirm. Also, there is a big gap below, begging to be filled.

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Comment by Blain

2006-11-01 14:07:14

That is a well made comment Ann, and I appreciate you taking the time to write in. I agree with your current opinion about a short term downtrend. Lately there has been relatively light volume, and I do not mind the sell off in this area. Though I agree consdolidation is currently occuring, I do not think the gap up from earnings will be filled anytime soon. I say Apple goes to $86 by the end of November. Do you have a blog or site yourself? I’d be interested to read more about you and your work. Best Regards,

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