Let’s update our charts after last week’s “Apple Support Bounce Challenge” and plan the next move.
We’ll start with the Daily “Price Only” Chart:
First, take a moment to read last week’s post on the “Support Bounce Challenge” at the $92.50 level.
Today allows us to fast-forward to a strong breakdown just under $90.00 per share.
However, Friday and now Monday saw the bulls overwhelm the sellers (and short-sellers) to burst price back above the breakout level near $92.50.
IF price holds above this level this week THEN it will likely trigger (spring) a Bull Trap.
Either way, our key focus should be on $92.50 and the departure away from this critical pivot.
Here’s an indicator and volume chart for more information:
Starting the the Trend, Apple (AAPL) is in a downtrend with lower lows, lower highs, and a bearish moving average structure.
Price triggered an aggressive breakdown (sell-signal) under $92.50 that was met by bullish pressure at $90.00.
What happens next will be key. Short-sellers will be forced to buy-back their shares (sold-short) at a loss when their stop-losses trigger above $92.50 and $95.00.
Buyers – eager to pick up Apple shares at a discount – will likely enter at current levels.
To the extent that these bullish forces pressure share prices higher, we’ll likely see the bounce succeed.
Otherwise, sellers regain the upper hand (in the supply/demand relationship) under $92.50 and especially $90.00 at which point it would be the buyers selling (liquidating) as their stop-losses are triggered.
Whatever your position or logic on what should or should not happen with Apple here, focus on $92.500 and this week’s departure from this critical pivot.
This article is brought to you courtesy of Corey Rosenbloom from Afraid to Trade.