Apple Inc (AAPL) showed some interesting patterns today on its intraday chart – I thought you might like to take a closer look.

The day started with an overnight gap down that didn’t fill, although price achieved a 50% retracement.

Gaps that fail to fill can lead to larger trend moves in the original direction of the gap, which in this case took price to new lows.

There were two entries (trades) that could have been taken to the short side in that structure:

Both trades set-up as price retraced to the declining 5-period moving average (with a stop just above the falling 50 period MA).  Generally, it’s best to play for a small target, but in the structure of a trend day, you can use a type of trailing stop strategy (trailed above the 20 period MA).

Price formed divergences into the noon hour, and the 1:30 time formed a higher low, setting up a potential “Sweet Spot” trend reversal trade (with the purple hour that triggered when price rose above the 1:00 swing high).

In terms of being interesting, I wanted to highlight the strange consolidation pattern for the 2:00 hour.  Price was literally sandwiched between the falling 50 and rising 20 period moving average before breaking out to the upside just after 3:30.  It’s rare to see price respond so starkly to these averages in such a clear pattern.

Also, notice the new momentum highs at 1:00 and 2:00 (momentum precedes price, meaning that intraday swing price highs were likely yet to come).

Apple has been doing exceptionally well on the daily chart, but could be encountering resistance which is setting up a sell swing (or brief retracement).  There’s plenty of volatility and price range in this stock to do well as an intraday trader, but if you want to play the daily chart, you might consider options strategies.

It could be another good year for Apple and I’ll continue to update you on patterns and trends I see developing in this and other stocks!