Hello. I have been looking into Apple stock for a few days now and have noticed the following:
When Apple drops below the 70 RSI on the monthly chart, it tends to run down to the 50MA on the monthly within 1-3 months. Everytime this has happened it’s led to a nearly 46% drop in share price.
Occurrences:
09/12 to 07/13
06/15 to 04/16
10/18 to 12/18
01/20 to 03/20 but only the 20MA
Potential strategy: watch for Apple to hit 110 support and look for strong price action downward. Secondary confirmation is breaking of the 50MA on the daily At 109.83. Today’s rejection of 118 closed Apple below the long legged doji from Wednesday. Many bearish indicators mean a long dated put for January 2021 would be safest.
PT: Apple 70 before EOY.
When Apple drops below the 70 RSI on the monthly chart, it tends to run down to the 50MA on the monthly within 1-3 months. Everytime this has happened it’s led to a nearly 46% drop in share price.
Occurrences:
09/12 to 07/13
06/15 to 04/16
10/18 to 12/18
01/20 to 03/20 but only the 20MA
Potential strategy: watch for Apple to hit 110 support and look for strong price action downward. Secondary confirmation is breaking of the 50MA on the daily At 109.83. Today’s rejection of 118 closed Apple below the long legged doji from Wednesday. Many bearish indicators mean a long dated put for January 2021 would be safest.
PT: Apple 70 before EOY.
Trade active:
So I had doubts about this trend fulfilling yesterday (I even bought a call at 110.5 expecting a run this morning) and sold my call at 108.7 and switched to a 80p for 10/23. Going to trust my gut. Took a 25% loss on my portfolio but I’m feeling confident here.
The bounce off 106.0 was certainly expected as that closed a small gap from 106 to 107. However, we pulled below the actual gap of 106.4 which could mean we just had sold off so much this week. Confirmation was made by the sell off EOD which pulled us down to 106.5.
Bids on level 2 data seemed abysmal. No walls were being built up on the bid end, which tells me institutions are all but out of buying Apple stock until we hit a stable position.
I would watch level 2 book as we head to 100. If wall is 400k and above, it could signal that a bounce is due. Sell puts and switch to calls for next day. But be ready to sell for put at any sign of continued reversal.
There is a very good chance we see a massive drop this week. SPY estimates in bearish circles call for spy 300 before end of month which would place Apple at around 78 points. This would meet the 20MA on the monthly.
The bounce off 106.0 was certainly expected as that closed a small gap from 106 to 107. However, we pulled below the actual gap of 106.4 which could mean we just had sold off so much this week. Confirmation was made by the sell off EOD which pulled us down to 106.5.
Bids on level 2 data seemed abysmal. No walls were being built up on the bid end, which tells me institutions are all but out of buying Apple stock until we hit a stable position.
I would watch level 2 book as we head to 100. If wall is 400k and above, it could signal that a bounce is due. Sell puts and switch to calls for next day. But be ready to sell for put at any sign of continued reversal.
There is a very good chance we see a massive drop this week. SPY estimates in bearish circles call for spy 300 before end of month which would place Apple at around 78 points. This would meet the 20MA on the monthly.
