Apple Reversal: Time For The Pause That Refreshes

Was that the top in Apple?  Seriously doubt it,  but maybe in the very short-term, however.

The stock opened at its high and managed to trade just above $600 and then downhill  all day.  It has run too far too fast and needs some time  to consolidate, in our opinion.   We were lucky to get some out close to the top in the pre-market and now will wait for the stock to establish the lower end of, what we think, will be a short-term consolidation range with $600 as the upper bound.

We could be wrong and the market might just be repricing this beast to a new multiple in full parabolic mode.

What we do know for certain, however,  is that bulls eat, bears eat, and pigs get slaughtered.  The hedge funds,  who are probably the largest holders of Apple en masse, not only understand this but are also not afraid to act on the  axiom.

Also note in the chart below that almost every, albeit rare, long red candlestick since the beginning of the year has been followed by more selling the next day.

It’s been an incredible run, but now the time has come for the (short) pause that refreshes.

(click here if chart is not observable)

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3 Responses to Apple Reversal: Time For The Pause That Refreshes

  1. Bill Dowis says:

    “bulls eat, bears eat, and pigs get slaughtered.”

    I love that line. This is exactly why I sold some of my APR calls earlier in the week and protected my investment. Don’t be a pig.

  2. Pingback: AAPL: To Buy and To Hold | Shama-e Zaheer's Blog

  3. Harry Lawrence says:

    Rolling your calls out is another way to go, I rolled my April 505 to Oct 555 for even money last week. Sold 25% at 595, I will let that money rest and play the house money.

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