AAPL has been a great trader the past 10 days giving very good conservative signals as seen below on a 10min chart, though in actuality I was using a 5min chart, they’re very similar and the 10min shows up better here because of size restrictions. As you can see it broke above its 200ma (moving average) on Feb3. at approximately 92.50ish and then made a quick move up to the 96 range. That was more than I could resist for a short trade so as it pulled back and broke the 20ma it was time to book some profits.
Now notice that on the pullback during the early AM selling on the 5th that it bounces right from its high on the morning of the 3rd, so the horizontal trend line held. Later that day it comes up and takes out the high from the previous day. That told us that there was more potential in the stock if the market cooperated. As you can see in the chart, it did, rocketing up another almost 7 points in the next two days. Of course, it always helps to have Mr. Market on your side. You can also see the advantage of using trend lines in your trading as it helps to really give you good confirmation visually when an up trend may be coming to an end for the particular time frame you’re trading in. Besides breaking the trend line, it also broke back below the 20 and 50ma, so it eas time to say goodbye once again, primarily because both of the shorter moving averages were so far above, what I like to call extended, from the 200ma. As you can see however, AAPL did hold the higher horizontal line and had a good day yesterday, so I’m still keeping a close eye on it.