Market Close May 12th, 2020 APPLE

It seems that none of our prospective trades have triggered this evening. I tend to spring into action like the proverbial panther after the main market has closed.

Just before our Blog took a little twist, a trade had been triggered in Apple.

I thought this might be a good time to show you how I would handle the follow through for that trade. The profits will not be added to the current Blog portfolio since it is from the previous edition.

To the chart, Robin…

Apple

The buy was executed just above the resistance line you can see at $292.00. This was after the price had closed above our moving averages after flirting with the 21 EMA (blue).

As is the case quite often, the price will run after breaking through resistance because that is the spot a number of buy orders will most likely have gathered. This is why support and resistance levels are such important tenets of my book: Basic Trading: ‘A Beginner’s Guide to Trading and Investing…PROFITABLY’.

The price has had a little run and is now looking at the overhead supply warily. This is reinforced by the fact that the latest high in price has not been matched by a new high in the ROC in the panel below. In fact there is no new high in either momentum measure. This divergence is identified by a vertical black line.

I treat this kind of divergence as a warning and begin to batten down the hatches. It is only a warning. The momentum measures could just as easily return to their tracking of the price in their usual fashion.

I have put trend lines under the price – as is my habit – and put a trailing stop at $307.24. This level represents a level at which the price would cross my trend line. I will be out of this trade.

The trade is protected; the minimum profit is $15 per share. If the price happens to take off, we shall be there. If it falls back, we are out.

This trade in Apple is now complete from our theoretical point of view.

Maybe we will have some action to report after tomorrow’s close in the symbols we are following. As always, we will wait for a signal.

If you have any questions or comments, please drop me a line at: charlesgoddard2020@gmail.com

TTFN,

Charles

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