Wednesday, May 1, 2013

AAPL: No dragons

Apple Inc. (AAPL) is a company we all love to watch. I mean, I think it's more fun than Game of Thrones, even without any dragons.

So when AAPL gave a bull signal on Tuesday, I was determined to keep an eye on it the next day, just to see what happened.

AAPL, as the world knows, has been in a huge downtrend since September 2012. Fans of the company keep hoping that Tim Cook will somehow, like Daenerys Tergaryen, find a dragon or two to add some fire to his company's prospects.

AAPL failed the initial screening because it had too few successful breakouts to the upside in the past year. No surprise there. The stock in a downtrend.

But downtrends end, and it takes a while for the stats to catch up.

Alas, this was not the occasion. The breakout level on the 20-day price channel was $445.25. AAPL opened Wednesday below that level and immediately plummeted, reaching a low in the third half hour of trading of $434.39.

The breakout was unconfirmed. Whatever Lord Tim has hidden in his castle, the market remains unconvinced that he has any dragons.

References

My trading rules can be read here. And the classic Turtle Trading rules on which my rules are based can be read here.

At several points in my analysis I use the number 68.2%. This comes from statistics and refers to the one standard deviation boundaries, which are expected to contain 68.2% of whatever is being studied. Putting it another way, given an item (a trade or whatever), there is a 68.2% chance that it will appear within those boundaries.

Disclaimer
Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.
No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decision decisions for his or her own account, and take responsibility for the consequences.

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