DanV
Long

APPLE - TAKE A BITE OR 2, FOR BULLISH MOVE

NASDAQ:AAPL   APPLE INC
943 9 2
Apple             Ic             - has lost nearly 28% of it value and whilst we accept that its best days are over, based on Elliottewave the recent high appears to be major WAVE 3 (incidentally Elliottwave International might explain that the major change over from Steve Jobs the key individual behind the success story of Apple             to present CEO             could coincide with Major top wave 3), looking back fro its early days in 1989. Presently I think it is retracing in major wave 4. Seasonally January results normally accompanies further weakness in Apple             share price. Hence I think that the present retracement could bottom out in January when it might offer last significant buying opportunity for the ride up in Major Wave 5 which could at least retest the all time high or make new higher high. The expected bottom would be $470 -80 area, which would be 38.2% retracement of the move since low of 2009 and has several other Fib confluence. Also in Gann Analysis a fall of 33.33% from all time high = $467 area could experience major bounce and it also could take place with rising trendline from 2009. This lines up with my theory that 2013             would be a mega year for most Risk Assets as Stock Market attempt to make new high or forms a Top that will last for Decades. The best way to play this would be out of the money long term call options in Late January 2013             .
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Hi Thanks for taking the time to view my chart & agreeing with the analysis. Not sure what your plans for the stock. I will wait till late in Jan review and look for long option play as explained in the text.
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hi I agree with you that we are in wave 4 down. Do yo think this is the primary wave 4 down of Cycle wave 3?
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DanV MOD learntotrade30
Hi, Thanks for taking the time to view my chart & agree with the analysis. I think this is a major wave 4 (so in your term it is likely Primary wave 4). I have attempted to count the major wave from almost the start of the Apple Inc price data available from around 1989. If correct we could expect a rest of the all time high region in case of truncated wave 5 or new high.
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This could easily rip 50 handles up with the amount of shorts in there right now. Sales are good on I phones, planning on I-6 soon along with Apple TV in various partnerships. Relative to earnings I still think they are super cheap right now. Currently playing a out of the Money Butterfly to the upside as we go into earnings.
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If this low holds we are at the bottom of the pitchfork now and all it will do is go up.
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DanV MOD paulyberndt
Hi thanks for taking the time to view my chart and agree with the analysis. As you will note in the previous comments, seasonally after Jan earnings , Apple has dropped most of the time. If that happens this time, I suspect that the best buying the Apple will be Best at lower price later in Jan. But then Continue to recover and may be retest the all time high.
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Historically Apple has always declined after the Jan earnings. So this time declining by 5% or so after the market closed is no surprise. However, As it has declined quite noticeably from all time high and now this drop could land it is the target zone I identified when this chart was published. Hence a potential long entry could be looked for actively and possible by Long Term Option, say at least 6 months or more and out of the money, either just Call or Call spread that meets your risk tolerance for it to retrace at least 50% of the decline or more, even new high. Hope you follow me on this one according to your trading plan.
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snapshot


UPDATE - Massive gap down on Jan earnings on very high volume (historically accompanies poor price). But after substantial decline to date, could it signal exhaustion gap or capitulation?
Key to note now is that if the price continue to drift lower, it should be on substantially low volume or actually attempt to rally and then fall on lighter volume and retest low or make higher low. That could suggest the selling is over and possible long position could be considered with defined stop loss. Better to trade this bu using directional out of money with Oct-Dec time view for recovery but far out of the money to keep the risk low which should pay well even if we only bounce for 50%-61.8% retracement of the overall decline. Or similar Option spread trade, depending on your view and acceptable risk.
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Chart closed as not trade triggered at 450 - 460 area for long as anticipated. But I think it is delayed and long will soon develop, according will reconsider and publish updated chart
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