Apple Inc. designs, manufactures, and markets mobile communication and media devices, personal computers, and portable digital music players to consumers, small and mid-sized businesses, and education, enterprise, and government customers worldwide. The company also sells related software, services, accessories, networking solutions, and third-party digital content and applications. It offers iPhone, a line of smartphones; iPad, a line of multi-purpose tablets; and Mac, a line of desktop and portable personal computers.
Take a look at the 1-year chart of Apple (NASDAQ: AAPL) below with added notations:
After hitting its 52-week low in May, AAPL began a rally that took the 30 percent higher. However, the stock eventually stalled, as AAPL has repeatedly hit the same resistance at around $117.50 (red). A solid close above the $117.50 area, preferably on an increase in volume, should lead to another leg higher for AAPL.
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The Tale of the Tape: AAPL has a 52-week resistance at $117.50. The possible long position on the stock would be on a breakout above that level with a stop placed under it.
Before making any trading decision, decide which side of the trade you believe gives you the highest probability of success. Do you prefer the short side of the market, long side, or do you want to be in the market at all? If you haven’t thought about it, review the overall indices themselves. For example, take a look at the S&P 500. Is it trending higher or lower? Has it recently broken through a key resistance or support level? Making these decisions ahead of time will help you decide which side of the trade you believe gives you the best opportunities.
No matter what your strategy or when you decide to enter, always remember to use protective stops and you’ll be around for the next trade. Capital preservation is always key!
Christian Tharp, CMT
Follow me on Twitter: @cmtstockcoach