Saturday, April 28, 2007

How would you play AAPL

As most of you know (and if you don't, and you are a trader, you are slacking) Apple broke out to knew highs on significant volume after earnings. The question now is, how do we play this brekaout?

The stock was over $100 in after hours when it reported Wednesday night, but failed to hold this major round number Thursday *and* closed at the day's lows. These are not good signs. However, Friday the stock held gap support, which is is a positive for bulls. Breakouts to highs off of a cup and handle formation (which AAPL did) can lead to powerful upswings, which is another positive for this stock.

I might be willing to take a small nibble under $100, but I won't increase position size until we see some more clear signs of strength. If the stock can not hold support, I would expect it to fall back to the 50 day moving average and may initiate a short position.

6 comments:

MillionDollarJourney.com said...

This has nothing to do with AAPL, but what do you think of the QCOM breakout and pullback to support?

FT

Ragin' Cajun said...

Simple answer, Buy AAPL!

The Market Speculator said...

Ragin: Thanks for simplifying :)

MDJ: Lots of support at $44, however, I'm concerned that the stock gapped down on pullback.

Reno said...

I would like aapl long around 95ish on a pullback. Otherwise I would pass.

MillionDollarJourney.com said...

The volume was fairly high also during the pull back of QCOM, would that be another warning sign?

FT

The Market Speculator said...

You are right, MDJ. It's not the type of pullback I look for. The stock could go up, but it's too high risk for me.