We're reviewing AAPL on a daily basis for the month of July. This is the second chart study, you can find yesterdays link attached. The goal of these is to teach some chart concepts while creating an actionable trading plan.
We’ll skip the Trend Analysis as yesterday’s review still holds true.
Comparative Analysis
Let’s start by briefly looking at the broader market. The chart in the bottom right is the S&P 500. We can see we’re in a trading range, which is illustrated with the blue channel. Note the supply and demand areas, these will likely come into play over the next session or two. For the near term, I think the top of this trading range will hold as resistance for a little while, as we absorb supply.
Over the past few session AAPL has been slightly lagging SPY, which lead me to a somewhat bearish look for todays (July 6th) session. Today AAPL has outperformed the SPY and has performed in-line with the QQQ’s. The yellow and green indicator is the “Relative Strength Comparison” indicator. It compares SPY with the QQQ.
All in all, AAPL is a massive out-performer and I believe it’ll continue.
Volume Spread Analysis
1. Price gaps up into the upper-channel resistance and closes lower than 50% of its spread on high volume . ( bearish )
2. We see a larger reaction to the downside met with high volume . This volume is buying mixed with selling. ( bullish )
3. We have a nice reaction to the upside on quite lower volume than the previous down-bar, this means we are absorbing supply. ( bullish )
4. Large effort with little progress to the downside. This shows that, while supply is present, it's being effectively absorbed. (bullish)
5. Gap up into supply and a sell-off on strong volume, but failed to commit a close below bar 4. (bullish)
6. This one is a wee bit tricky. While we broke all local resistance, we didn’t do it on breakout volume, so, this is not a breakout yet. Based on the volume signature, this candle has reasonably strong change of being reversed. (neutral) Conclusion & Trading Plan
We made progress to the upside, indicating that supply overhead is diminishing, but we didn’t see big volume come in, which means strong hands weren’t participating in today’s move.
I have to remain a bit skeptical on a low volume break above resistance. If you look at the charts on the left, I’ve outlined a few demand areas and emphasized two large volume nodes in the VAP. The 30 min demand area which has been tested already, is my first potential long area. If the market is bearish we could easily lose this area since it’s already been tested.
If the market gaps up tomorrow, I’ll sit tight and wait for the top of the channel for AAPL and the top of the trading range in the S&P. If we open bearish, I’ll watch for the 4h demand area to hold as support for the S&P. If it holds out, I’ll look to long off of one of my demand/support areas.
- Comparative Analysis (Compare to broader market)
- Volume Spread Analysis
- Conclusion & Trading Plan
We’ll skip the Trend Analysis as yesterday’s review still holds true.
Comparative Analysis
Let’s start by briefly looking at the broader market. The chart in the bottom right is the S&P 500. We can see we’re in a trading range, which is illustrated with the blue channel. Note the supply and demand areas, these will likely come into play over the next session or two. For the near term, I think the top of this trading range will hold as resistance for a little while, as we absorb supply.
Over the past few session AAPL has been slightly lagging SPY, which lead me to a somewhat bearish look for todays (July 6th) session. Today AAPL has outperformed the SPY and has performed in-line with the QQQ’s. The yellow and green indicator is the “Relative Strength Comparison” indicator. It compares SPY with the QQQ.
All in all, AAPL is a massive out-performer and I believe it’ll continue.
Volume Spread Analysis
1. Price gaps up into the upper-channel resistance and closes lower than 50% of its spread on high volume . ( bearish )
2. We see a larger reaction to the downside met with high volume . This volume is buying mixed with selling. ( bullish )
3. We have a nice reaction to the upside on quite lower volume than the previous down-bar, this means we are absorbing supply. ( bullish )
4. Large effort with little progress to the downside. This shows that, while supply is present, it's being effectively absorbed. (bullish)
5. Gap up into supply and a sell-off on strong volume, but failed to commit a close below bar 4. (bullish)
6. This one is a wee bit tricky. While we broke all local resistance, we didn’t do it on breakout volume, so, this is not a breakout yet. Based on the volume signature, this candle has reasonably strong change of being reversed. (neutral) Conclusion & Trading Plan
We made progress to the upside, indicating that supply overhead is diminishing, but we didn’t see big volume come in, which means strong hands weren’t participating in today’s move.
I have to remain a bit skeptical on a low volume break above resistance. If you look at the charts on the left, I’ve outlined a few demand areas and emphasized two large volume nodes in the VAP. The 30 min demand area which has been tested already, is my first potential long area. If the market is bearish we could easily lose this area since it’s already been tested.
If the market gaps up tomorrow, I’ll sit tight and wait for the top of the channel for AAPL and the top of the trading range in the S&P. If we open bearish, I’ll watch for the 4h demand area to hold as support for the S&P. If it holds out, I’ll look to long off of one of my demand/support areas.
Comment:
Price found support in my 30m RBR demand area :)
Comment:
Pretty satisfied with the overall analysis. I didn't think that AAPL would have a major followthrough based on yesterdays candle.
Comment:
AAPL back in the 30 min RBR demand area. Every test weakens the demand.
