Long

Reflation of the FAANG Bubble 23.6% and 38.2% objectives

Updated

Fibonacci Retracement
Candlestick Formations
Volume
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This is a potential plan for the next two months or more leading into January earnings.

AAPL is down 54 points from its peak and we believe it can retrace back to one of the 200 price levels that it established earlier in the summer. Since October it went from 233.47 to 176.98, a massive slide of 50+ points would have been 378 if adjusted to the 7-to-1 stock split

Because this is a weekly chart we think that each point on the weekly time frame matters from open to close; meaning every inflection from where price initiated a sell-off is probably where the late buyers should be dumping their shares

Here's how we would interpret the fibonacci sequence: what is most obvious is that the 23.6% and 38.2% are locally speaking more attainable targets

(1) a reclaim of the 188
(2) a test of the 198.23

The difficult part is that holding above 204.96 the 50% retracement

Its not that unheard of given the way the stock acted this summer, and if there is any disinformation (news manipulators) with excessive downgrades traders will be getting ready for a surprise in earnings

So then the focus would involve capital preservation where we are only risking 15 to make 30. This week the range established for AAPL was 15.19 and we would place a protective stop below 162. A rally back up to 190 would cancel out all of the selling damage done this week, and price had a lot of trouble holding onto 191-192+ The attempt at a come back would involve methodically slow crawls back with bounces that are hard and fast so we anticipate ranges from 7 to 10 points in height until 200 to 204.

Candlesticks - exhaustive selling
There was some wavering going on in October where price bounced between the 200 and 220 before the earnings break out and 11/5 is where price was "calmest" before exciting everyone into thinking there was something fundamentally wrong (could be long term) with the company

We are only looking for a rally of 12 to 15% when the stock tanked 25% in a little bit over a month.

Trade active

One of our first milestones is within reach, given the shortened holiday week of trading we anticipate most of the progress happening after Friday of this week, but with price close to 180, it is starting to show some momentum pre-market, and we expect it to run 5 points higher to 182+ by Friday

Trade active

There are some long ideas that have worked well for us off the 170 level, (between 170 and 183 this update comes at a time where we might just have to be buyers below 170, and wait for another revision to this strategy, meaning it might not work.

Note

Changing the price target from 205 or so to a bit above 200......The price at 170.26 it bottomed only temporarily, we think with all the negative momentum there might be a chance of it trading below that point, given the fact that most of this hinges on trade-war news or a resolution. When I originally wrote this AAPL was trading at 175 and we didn't think it would get below that, but given the 15 point advance (running from 170.26 to 184.95 yesterday) the stock would ultimately hit 200, they have plent of reasons to tell a story about growth in software demand

Trade active

We will be defining the profit zone between 180 and 202.50 for calls, and selling the stock short between 180, 182.50, 185, 195, 197.50, and 200-203, after that we expect the stock to trade slightly above the Warren Buffet entry price at 90-120!!

Note

The overall strategy has not changed in direction, overall the "mean reversion" plan still has its merits. Price target has changed to 198 to 200

Trade active

We will be using another indicator to confirm a possible area of resistance and potential of turning down.

Trade closed: target reached

The only option I was given was to state the closing of the trade as if it were in the past tense, however, we are closing the trade at or before the Apple announcement next week

DamianRichardson

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