We have not written about AAPL in a while. The stock has been on an amazing run, but this parabolic move has been one we have avoided. Reason being, we are in the “this parabolic move in AAPL is going to end ugly” group. That said, AAPL is a short killer and trying to fade it rarely proves profitable. Therefore, we are just staying away for now.
So we’ve established we haven’t traded AAPL in a while, but we have been watching it on a daily basis. Let’s take a moment to discuss it.
On January 25th, AAPL blazed through 425 resistance (red line) after reporting killer earnings. This resistance break is noted in the first image above. As you can see, the upside earnings gap took it well above resistance and the stock never looked back. An absolutely amazing run that must be respected.
Let’s move on to the next image. Note the three yellow lines. These lines indicate accelerated up trends. Prior to the earnings gap, there were two uptrend lines established. The first line was a little flat, approx 35 degrees. The second line was the optimal up trend angle of 45 degrees. This latest line that has held since January 25th earnings is very steep, representing the parabolic price action we noted earlier. Lines this steep never stay in tact. We are keeping an eye on it, and intend to place a bearish strategy on AAPL when we see a closes below that line.