AAPL is the chart that our members chose in chat for me to review daily. This chart study will include the following:
Please note, my goal is never to predict. It's to analyze the market and produce reasonable trading plans based on my analysis.
Trend Analysis
Apple has been a major our performer since we reached the Covid-19 catalyst bottom. If we look at the top right chart (daily), we see red horizontal lines. These are the measured upthrusts, we can see the previous two upthrusts are roughly 10% each, while the last upthrust was met with high volume and only pushed about 5% from the previous high. This is slightly bearish for the overall trend, but does not give us reason alone to be overwhelmingly bearish. We're just meeting supply at this level, we could A.) absorb the supply and move up B.) correct into a trading range and re-accumulate. This outcome will depend on the broader markets performance in my opinion. Right now the S&P is in a trading range as you can see in the lower right hand chart.
Comparative Analysis
We'll first look at our helper indicator, which is the green and yellow indicator named "Relative Strength Comparison" which measuresan equity's performance against the broader market. We can see on the daily chart (top right) we've been wildly outperforming the market. But if we look at the 1 hour chart (bottom right) we're starting to lose that outperformance momentum.
Now, looking at the candlesticks in comparison. The S&P printed two bullish candles, one with large spread and one with a smaller spread. If we compare those last two candles to AAPL, we can see plainly that the S&P has outperformed over the past few sessions.
Volume Spread Analysis
Please note the numbered bars on the top right Daily chart.
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. Price opens and attempts to push into our daily supply zone, note the white box on the daily chart. Whenever price reaches into this level, we are performing poorly. Note the S&P's close on this same candle, nice bullish candle with a decent close. (bearish)
5. We see a small increase in volume but a larger candle spread than our previous candle. (slightly bullish)
Conclusion & Trading Plan
Based on slight underperformance over the past week and overhead supply. I believe AAPL is in absorption mode for the next move. Which means, I think we'll largely trade sideways for the next few days. Each time AAPL reaches that supply area, we get rejected. So, until we see a close in that supply area on the daily chart, my personal bias will be:
Short on weakness within the supply zone.
Sit on hands if price is trading between the 1h demand zone and the 1 day supply.
Long if price shows strength within the 1 hour demand area or on a bounce off the lower channel trend line. The long is a bit riskier because we've tested this level several times now and Apple has been underperforming.
- Trend Analysis
- Comparative Analysis (Compare to broader market)
- Volume Spread Analysis
- Conclusion & Trading Plan
Please note, my goal is never to predict. It's to analyze the market and produce reasonable trading plans based on my analysis.
Trend Analysis
Apple has been a major our performer since we reached the Covid-19 catalyst bottom. If we look at the top right chart (daily), we see red horizontal lines. These are the measured upthrusts, we can see the previous two upthrusts are roughly 10% each, while the last upthrust was met with high volume and only pushed about 5% from the previous high. This is slightly bearish for the overall trend, but does not give us reason alone to be overwhelmingly bearish. We're just meeting supply at this level, we could A.) absorb the supply and move up B.) correct into a trading range and re-accumulate. This outcome will depend on the broader markets performance in my opinion. Right now the S&P is in a trading range as you can see in the lower right hand chart.
Comparative Analysis
We'll first look at our helper indicator, which is the green and yellow indicator named "Relative Strength Comparison" which measuresan equity's performance against the broader market. We can see on the daily chart (top right) we've been wildly outperforming the market. But if we look at the 1 hour chart (bottom right) we're starting to lose that outperformance momentum.
Now, looking at the candlesticks in comparison. The S&P printed two bullish candles, one with large spread and one with a smaller spread. If we compare those last two candles to AAPL, we can see plainly that the S&P has outperformed over the past few sessions.
Volume Spread Analysis
Please note the numbered bars on the top right Daily chart.
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. Price opens and attempts to push into our daily supply zone, note the white box on the daily chart. Whenever price reaches into this level, we are performing poorly. Note the S&P's close on this same candle, nice bullish candle with a decent close. (bearish)
5. We see a small increase in volume but a larger candle spread than our previous candle. (slightly bullish)
Conclusion & Trading Plan
Based on slight underperformance over the past week and overhead supply. I believe AAPL is in absorption mode for the next move. Which means, I think we'll largely trade sideways for the next few days. Each time AAPL reaches that supply area, we get rejected. So, until we see a close in that supply area on the daily chart, my personal bias will be:
Short on weakness within the supply zone.
Sit on hands if price is trading between the 1h demand zone and the 1 day supply.
Long if price shows strength within the 1 hour demand area or on a bounce off the lower channel trend line. The long is a bit riskier because we've tested this level several times now and Apple has been underperforming.
Comment:
Nice gap up with the market into the supply area. I'm watching for underperformance against SPY intraday.
Comment:
AAPL outperforming against SPY today. Sitting on my hands for the moment.
Comment:
AAPL is through the supply level. Going to scratch the trade plan and re-evaluate this evening.
Essentially, AAPL absorbed supply better than I had anticipated. But I'd rather follow my trade plan that chase. Thats where mistakes happen.
New chart tonight.
Essentially, AAPL absorbed supply better than I had anticipated. But I'd rather follow my trade plan that chase. Thats where mistakes happen.
New chart tonight.
Comment:
End of day review...
So I'm not thrilled about this, but I think I really missed the mark in my bar-by-bar analysis particularly on bars 4 and 5, and these were crucial bars to get right.
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)
Had I gathered these bars correctly, I would've been more prepared for todays session.
Time to create a new chart for tomorrows trading day.
So I'm not thrilled about this, but I think I really missed the mark in my bar-by-bar analysis particularly on bars 4 and 5, and these were crucial bars to get right.
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)
Had I gathered these bars correctly, I would've been more prepared for todays session.
Time to create a new chart for tomorrows trading day.
