Thursday, November 13, 2008

Watching AAPL


I want to bring your attention to the chart of Apple, ticker AAPL (chart above). Remember the pennant formation that got me short against the upper boundary, well, we are now testing the lower boundary of it. Eyeballing the pennant, it looks to be worth approximately $36 give or take a buck. A break of $90, which looks likely at the open, given Intel's earnings news, would signal another leg down with a target of $54 (90-36=54).

Some may argue to get long against the lower boundary, which is quite logical. The problem here is that we are in a bear market and if this market has proven one thing it is that things can get much worse than any of us think possible at the time. Hard trade to get short on a darling stock that is severely oversold on a gap down? You bet but we must respect that the hard trade is usually the right trade. Hopefully this is not an exhaustion gap.



Good speculating to you all and never forget that "an investor is a speculator who made a mistake and will not admit it".


Open Positions:
Long 1 unit of Ultrashort Russell 2K ticker TWM $93.10 stop @ IWM $56.31
Short 1 unit Apple ticker AAPL at $110.90 stop @ $113.53
Short 1 unit Salesforce.com ticker CRM @ $56.05 stop @ $34.31

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