AAPL continues to be a trading stock while it attempt to consolidate. Unless you are an active trader, you will likely get chop by AAPL’s recent volatile price actions.
From the above daily chart, the 525.62 closing low on 11/25/12 turns out to be the start of the current positive MACD divergence. In addition, the 505.75 low made by the long wicked hammer doji candle on the following day appears to be the floor for future prices to penetrate. So far, three attempts; 12/14/12, 12/17/12 and 12/27/12 when the price moved below the 505.75 level, all three times the price bounced back and closed above it. More importantly, the closing price on 12/28/12 is 20 cents lower than the 12/14/12 close while the MACD held a higher level on 12/28/12 than on 12/14/12. This is another sign of continuation of the positive MACD divergence. This MACD divergence could end up simply being an indication of a pause in the current downtrend, or it can be a precursor to an uptrend. In regardless, the recent price actions along with the MACD divergence should be taken as an alert to lighten up any existing short positions and resist from initiating new short positions until it has closed below the 505.75. For the active short term traders (day traders), it would be more prudent to focus on setup to go long than to focus on setup to go short as the 505.75 appears to be the support level until it has been breached.
Until the price has closed above the 1/2/13 high of 555 to establish a higher high and a higher low with prices hold above 12/28/12 close of 509.59, resist from initiating new swing long position unless you consider holding a position overnight is a swing trade. Until then, continue to exercise patience.
Caveat: If the price closed below 509.59 prior to closing above 555, then the long bias will no longer hold.
