AAPL Ascending Intermediate Trend Break Bear Market Play
Description
AAPL has had a nice run up following the upside break of its intermediate bear trendline (descending 2pt red line) on 24 JUN, forming its new intermediate upside trend (ascending 2pt green line) all the way up to its Descending Major Bear Trend (descending 3pt line) cemented on 30MAR.
This week and the next will certainly end with a clearer picture for direction moving forward, but given current market conditions it is more likely that it should be down.
SPY and DIA have seen similar intermediate moves, but have not made it to their descending major trend lines yet meaning a reversal is still far from being signaled, and this week will show how the IXIC behaves after having
breached it on 10 AUG.
It is still early in the Bear Market - geopolitical and economic risks have not cooled substantially to merit a major reversal in trend.
Real inversion of the Yield Curve has only just occurred on 13 JUL and the trends are in for further inversion moving forward.
Technical Indicators to signal the entry:
Technical Risk Factors:
There is no real price target here as this is basically a trend trade - hence a longer dated Put - but there are take profit targets @ 156.5, 137 & 130. If all targets were met, advise a runner and potentially a roll down and out prior to expiration.
Using a Long ITM Put here in order to:
achieve a higher delta,
maintain a conservative position,
get long volatility while the VIX is low, and
leave the downside open in case of a long, swift fall.
Long Put
Levels on Chart
SL: 177.5
PT: Down the trend
TP: 156.5, 137 & 130
*Stops based off underlying stock price, not mark to market loss
The Trade
BUY
10/21 180P
R/R & Breakevens vary on fill.
Manage Risk
Only invest what you are willing to lose
I warrant that the information created and published by me on TradingView is not prohibited, doesn't constitute investment advice, and isn't created solely for qualified investors.
AAPL has had a nice run up following the upside break of its intermediate bear trendline (descending 2pt red line) on 24 JUN, forming its new intermediate upside trend (ascending 2pt green line) all the way up to its Descending Major Bear Trend (descending 3pt line) cemented on 30MAR.
This week and the next will certainly end with a clearer picture for direction moving forward, but given current market conditions it is more likely that it should be down.
SPY and DIA have seen similar intermediate moves, but have not made it to their descending major trend lines yet meaning a reversal is still far from being signaled, and this week will show how the IXIC behaves after having
breached it on 10 AUG.
It is still early in the Bear Market - geopolitical and economic risks have not cooled substantially to merit a major reversal in trend.
Real inversion of the Yield Curve has only just occurred on 13 JUL and the trends are in for further inversion moving forward.
Technical Indicators to signal the entry:
- Daily close below the intermediate trend accompanied by significant volume spike
- Major Trend Line rejection
- Downside break of the 168 - 171 Supply/Demand Zone
- Bear cross on MACD
Technical Risk Factors:
- Golden Cross on 50/200 EMA
Although a golden cross is usually considered a strong reversal signal, I am discounting this technical risk factor due to the 200 EMA remaining relatively flat in the early bear market.
- VIX downside break of Major Ascending Trendline on 4 AUG
- IXIC established over Major Bear Descending Trendline
There is no real price target here as this is basically a trend trade - hence a longer dated Put - but there are take profit targets @ 156.5, 137 & 130. If all targets were met, advise a runner and potentially a roll down and out prior to expiration.
Using a Long ITM Put here in order to:
achieve a higher delta,
maintain a conservative position,
get long volatility while the VIX is low, and
leave the downside open in case of a long, swift fall.
Long Put
Levels on Chart
SL: 177.5
PT: Down the trend
TP: 156.5, 137 & 130
*Stops based off underlying stock price, not mark to market loss
The Trade
BUY
10/21 180P
R/R & Breakevens vary on fill.
Manage Risk
Only invest what you are willing to lose
I warrant that the information created and published by me on TradingView is not prohibited, doesn't constitute investment advice, and isn't created solely for qualified investors.
Comment:
Will most likely be taking my entry today based off of SPY, DIJA, IXIC intermediate trendline breaks.
Trade active:
Filled @ 11.55.
Trade active:
Contracts closed Friday @ 30.35.
The indexes all closed below another, secondary trendline and I expect markets will continue in this direction.
I expect Monday and early Tuesday to be red with a small reversal and low volume through Wednesday until a late-week rally, which is characteristic of an FOMC where all expectations were met (if all expectations are met).
130 remains the lowest I would expect to see AAPL within the time frame of the position, but if AAPL remains within the trend following closing the position, I would consider opening a similar one out and down from the current one, as, under normal conditions, 120 is where I expect to see a base occur.
The indexes all closed below another, secondary trendline and I expect markets will continue in this direction.
I expect Monday and early Tuesday to be red with a small reversal and low volume through Wednesday until a late-week rally, which is characteristic of an FOMC where all expectations were met (if all expectations are met).
130 remains the lowest I would expect to see AAPL within the time frame of the position, but if AAPL remains within the trend following closing the position, I would consider opening a similar one out and down from the current one, as, under normal conditions, 120 is where I expect to see a base occur.
Trade closed manually:
Filled @ 27.35, + 137%.
I pyramided a little bit so my PnL is a little different than the percent return would indicate.
I pyramided a little bit so my PnL is a little different than the percent return would indicate.
This signal combined with my SL is sufficient for my Risk Profile.
More conservative plays include waiting for each successive Technical Signal to trigger.