Edited: This article originally appeared on Jan. 29, 2014, on RealMoney.com. To read more content like this plus see inside Jim Cramer's multimillion-dollar portfolio for FREE... Click Here NOW.
NEW YORK (Real Money) -- Let's look at the technical parameters in Apple
(AAPL) from the weekly chart down to the daily. I realize that not everyone is a technical trader, though these charts can provide an important framework or road map for traders. Let's start by reviewing the weekly chart, taking it from the last big decision to the next.
In December, I warned about key weekly resistance that came in at the $575.86-$582.84 area. This zone included a major 0.618 retracement, a 100% projection of a prior rally swing along with another minor upside target that was met.
Since then, we have seen a healthy downside correction, and I have been monitoring both the Fibonacci time and price parameters to watch for possible buying opportunities. We did see one in January when we started to see a nice bounce (around $30.00), though price failed to clear a hurdle it needed to clear to head toward a target off that key low.
Then, as you know, earnings came around. As for sitting through earnings, personally I don't recommend this unless you are totally willing to either sit through some insane moves or you are protected with some options strategies. Now that the report is over and done with, I'm looking at some very important support parameters on the way down.
The main decision on the weekly chart comes in at the $490.29-$498.26 area. This decision includes a .618 retracement of the prior major swing up, along with two 100% projections of prior declines that I have illustrated on this weekly chart. The two prior swings lasted $84.85 and $76.88. If you project 100% of those prior declines from the most recent high, you will come up with the symmetry support decisions I'm currently looking at. I consider this zone a major decision on the way down. If Apple is going to resume the rally anytime soon, this is the area I want to see if hold above. Now let's take a look at the daily chart.
On the daily chart, I am looking at a clustering of Fibonacci timing cycles that are due between Jan. 28 and Jan. 31, suggesting a possible intermediate low. We are seeing these cycles as we are testing the key daily support. Bottom line, if the key price support and timing parameters hold up, I want to take my buy triggers with the risk defined below this major zone. So far, I am not seeing these triggers just yet, but I am stalking them now. If this same key support is taken out by a decent margin instead, I will back off the buy side in this name until further notice. Let's see what Apple can do around this key decision and trade or invest accordingly.
At the time of publication, Boroden had no positions in stocks mentioned.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV