Sometimes that's just what happens, the good news gets discounted and then there are net-sellers or at the margin, there are more sellers than buyers, especially from stop-orders***.
Disregard if you know what a stop order is: (***Sell stop orders are orders to sell out of long positions, or to sell short if prices fall. Traders decide in advance to sell at lower prices to protect themselves from holding on during a larger decline. Stop loss orders are a lot like a life-boat. Sometimes there are a lot of false-alarms and other times it pays off and saves your financial life).
You can see that the Key Reversal happened right around the zone I have drawn in a white box where 8 days traded, the most frequent level of that box. That 8-day box set up a drop of the same size from that 8-day mode, a process I call "Time At Mode" and it allows you to project both time and price. In this case it has already reached the price objective.
Now it appears that AAPL has reached a healthy level of oversold and that there is a chance for a rebound back to the frequent-trading level at 112-115 from 109.46 last.
I would like to trade both sides of this setup: Going long here targeting 112.50 and then selling short and targeting 107-103.
Time will tell. I'll update this chart as the trade progresses.
Tim 12:41PM EST 10/2/2015 109.46 last.
For example: Let's say you have a $20,000 account and you want to risk 1% of your capital on each trade idea. In this case, your risk is $200.
Ask yourself: How many shares do you buy at 112 on your first buy level there to risk $200? How wide is the stop? Is it 110 stop? If so, you'd buy 100 shares and risk 2 points or $200. But that is more than half of your capital since 100 shares x $112/sh = $11,200. Either way, that is the position size. Once you get stopped out at $110. You can try again at $108 and use a $106 stop and once again you'd be able to buy 100 shares since the stop is $2 away an you have $200 to risk.
Alternatively, if your stop is at $106, you could wait to buy until $107 and then your stop would only be $1 away, then you could buy 200 shares, which is more than all of your capital in one trade. But the risk of $200 would be accurate. And in this case, if you filled at $107, your return now is $700 instead of $250 because you would have bought more stock at a lower level.
Think about these things - risk - stop - position size and the entry/exit techniques will be much more clear.