Apple (AAPL) has been on a hell of a bull run since January 2019 - up 123%.
However, a few recent signs point to increased volatility and the potential for price to pause in the short to medium term.
First up, trend line steepness has been increasing. Each leg has been rising at a faster rate, and while this can be considered a sign of strength, the most recent legs are unsustainable (in my humble opinion).
Markets are a constant battle been supply and demand, which is why price always zig zags on it's journey. The faster price changes, the greater the imbalance must be. At a certain point, all those who are holding AAPL longs will start taking profits, and short sellers will start viewing the price as overextended and ripe for plunder. Whether we're there yet is anyone's guess, but trading is a game of probabilities and you have to read the signs the market presents.
Next, a new Institutional Zone (IZ) has presented itself at the 321-327 zone. IZ's are one of my favourite ways of determining tradable areas in markets. Their composition is still a trade secret, but here's a clue: look for candles with small body and/or high/low range, and high volume. These are signs of large, institutional money creating positions in the market. Price will, more often than not, react to these zones in the future - presenting us small fish with opportunities.
You can see an example of a IZ formed on the 11th October 2018, and how price reacted to it at the start of May, August and October in 2019 (the 3rd October retest was a AAA grade entry opportunity).
A note: the green vertical lines highlighting the two IZ's are an indicator of my creation.
So, where is AAPL heading? Well, I have no idea. Predictions are a fools game. The market, at this point in time, is overwhelmingly bullish. However, signs are there that it may be worth taking some profit at current levels if you're holding AAPL longs. Remember, you can always re-enter if price breaks out again.
All the best,
DD
However, a few recent signs point to increased volatility and the potential for price to pause in the short to medium term.
First up, trend line steepness has been increasing. Each leg has been rising at a faster rate, and while this can be considered a sign of strength, the most recent legs are unsustainable (in my humble opinion).
Markets are a constant battle been supply and demand, which is why price always zig zags on it's journey. The faster price changes, the greater the imbalance must be. At a certain point, all those who are holding AAPL longs will start taking profits, and short sellers will start viewing the price as overextended and ripe for plunder. Whether we're there yet is anyone's guess, but trading is a game of probabilities and you have to read the signs the market presents.
Next, a new Institutional Zone (IZ) has presented itself at the 321-327 zone. IZ's are one of my favourite ways of determining tradable areas in markets. Their composition is still a trade secret, but here's a clue: look for candles with small body and/or high/low range, and high volume. These are signs of large, institutional money creating positions in the market. Price will, more often than not, react to these zones in the future - presenting us small fish with opportunities.
You can see an example of a IZ formed on the 11th October 2018, and how price reacted to it at the start of May, August and October in 2019 (the 3rd October retest was a AAA grade entry opportunity).
A note: the green vertical lines highlighting the two IZ's are an indicator of my creation.
So, where is AAPL heading? Well, I have no idea. Predictions are a fools game. The market, at this point in time, is overwhelmingly bullish. However, signs are there that it may be worth taking some profit at current levels if you're holding AAPL longs. Remember, you can always re-enter if price breaks out again.
All the best,
DD