Beware the Apple Trapple AAPL

May 16, 2016: 10:35 AM CST

Apple (AAPL) is tricking traders right now with a possible failed breakdown or Bear Trap Trigger.

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.

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Corey Rosenbloom, CMT

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2 Responses to “Beware the Apple Trapple AAPL”

  1. New Lows for Downtrending Twitter TWTR | Afraid to Blog Says:

    […] Be on guard for a possible “Bear Trap” like the example I highlighted for you in “Apple – Trapple.” […]

  2. Shah Says:

    This is why I love to trade through support/resistance levels, it’s best way to make good profits at fairly consistent rates, so this is why I always follow this blog which updates so much on these things and it helps me greatly. I also get a lot of support from my broker OctaFX, it’s really cool too with their cTrader platform, it’s especially develop for ECN trading and really helps with working especially the analyzing part and gives me great support.