• AAPL – Chart Suggests Buying Opportunity?

    by  • November 9, 2012 11:15 am • Charts to Watch, Quick Hits

    Yesterday, I tweeted that Apple’s (AAPL $549.44) 9-day Relative Strength Index (RSI) was at the May, 2012 low and suggested to shorts that prudent risk-management would include tightening stops or lightening up on their short positions.  According to the last short interest report, there is a relatively decent short position, as the shorts are at 2-1/2 year highs.

    This morning, I tweeted that AAPL’s dividend yield is 2 percent, implication being value players could very well be supportive at these levels.

    Taking a step back at the bigger picture techncial backdrop, AAPL could be a buy here for stock traders or option traders with a 2-3 month time frame.  Your target would be a move to $650, its April high, with a stop around $515, its 320-day moving average.

    The daily chart below since 2009 captures what I am seeing:

    1. Its 320-day moving average, which marked the low in June 2003, July 2006 and March 2008

    2. The potential 2012 “double bottom” in the $530 area – this morning’s low was $533.72

    3. The oversold condition, according to AAPL’s 9-day Relative Strength Index (RSI) – second pane in chart

    4. The relatively high short position – third pane in chart

    About

    Todd Salamone is a graduate of The Ohio State University. As Senior Vice President of Research, he oversees the strategies and analysis used in supporting Schaeffer’s various option recommendation services. He is the author of the company’s weekly e-newsletter, Monday Morning Outlook, and a contributor to Bernie Schaeffer’s SENTIMENT magazine. With more than 18 years of trading experience at his command, Todd manages numerous alert services for Schaeffer’s, and has introduced many sentiment-based indicators to its subscribers. Todd has presented option strategies to retail investors in cities throughout the U.S., and is a frequent commentator on financial markets via print, radio and television, including CNBC, The Wall Street Journal, and MarketWatch.

    http://www.schaeffersresearch.com/