Apple AAPL at Key Trading Pivot Level on Dow Jones News

Mar 6, 2015: 11:45 AM CST

Is Apple (AAPL) a buy right here at a key inflection level as news broke that Apple would replace AT&T (T) in the Dow Jones Industrial Average?

Let’s take a look at this key trader level and plot the bull/bear scenarios:

Just looking at the Daily Chart, Apple (AAPL) is a potential BUY for a flag/retracement pattern into the support of the rising 20 day EMA at the $126.00 per share level.

Stops would be placed under $125.00 and $126.00 and a bearish “alternate” or breakdown price pathway (aggressive short-sell opportunity) would open under $125.00 per share to target the rising 50 day EMA and prior price high confluence near $120.00 per share.

Note the Green and Red price pathways originating from the “Decision Point” at $126.00.

I highlighted two similar retracement patterns on the Daily Chart and you can view how price behaved.

The trend continued after a clean breakout higher triggered a breakout buy signal and buyers overtook sellers.

Right now, focus on $126.00 as the immediate “Bull/Bear” level and plan swing trades accordingly.

We can see the logic for a Bearish outcome as seen on the Weekly Chart, however:

The other time price was as overextended from the rising 20 week EMA (green) was late 2014 into $120.00 per share (the current sell target IF $126.00 fails) and we can see the short-term bearish retracement lower from this overextended level.

Last week saw a reversal candle into $130.00 per share and the potential for a continuation sell-swing (retracement) lower in shares.

So right now, it’s all down to the Daily Chart and whether buyers step in at the short-term support ($126) and trigger another bullish outcome, propelling shares higher.

The bullish case for support originates on the Daily Chart, but if price trades under $126.00 then $125.00, then look to the Weekly Chart for guidance toward $120.00.

Either way, focus on $126.00 right now and the two divergent pathways for price – and opportunities.

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Corey Rosenbloom, CMT
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2 Comments

2 Responses to “Apple AAPL at Key Trading Pivot Level on Dow Jones News”

  1. Joseph Says:

    Pivot levels are so important for trading especially in short term, if we are able to master this way we can make profits very often but if we don’t then it is difficult to be consistent. I found it hard but after learning from baby pips and having a broker like OctaFX where I was able to trade on their famous cTrader platform which is especially develop for ECN trading and allow us to trade smoothly without any re-quotes or delay.

  2. Mathor Says:

    Trading through pivot points can be great, but that’s only if we are well aware of the plot, if we are not aware of the things then we could face issues and loses, hence we got to be careful with how we work out things. I am trading with OctaFX broker where I get fair amount of comfort and this is mainly to put it with their rebate program that gives me fair bit back on all trading orders including losing one!