APP Watch

American Apparel Inc. (APP) is showing a volume spike this morning with very little price movement compared to most days the past few weeks.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
APP $1.24

So far today nearly 2.4 million shares of APP have been traded. That compares with volume of 377,986 shares for the entire day on Wednesday.

The price today rose slightly at the open and then declined, before bouncing back sharply. The bulk of the volume came during the decline.

APP has been in a downtrend since it hit a peak of $3.88 on March 25. Much of the decline came after earnings were announced on May 19, a day that saw a 41% decline in price intraday.

Since that devastating fall, the price has been meandering between $1.77 and today's low, $1.14.

Reversal Levels

• $1.77, +42.7%
• $1.24 <== You are here.
• $1.14, -8.1%

Like most penny stocks, APP is a decent play for swing traders. The percentage movements short-term are huge compared to higher priced shares. The volume spike will lack credibility as a harbinger of a renewed upswing unless it can occur on a price rise. In cases like this, the short-term intraday charts are essential to understanding what's happening with demand.

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Disclaimer

Tim Bovee, Private Trader tracks the 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.

Abbreviations:

• psar - Parabolic Stop and Reverse
• adx - Average Directional Index
• pps - Person's Proprietary Signal
• ma20 - 20-day moving average
• macd - Moving Average Convergence-Divergence
• sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.