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calven,  did the search but this thread title is more approprite for my post

learning to short... trying to catch a gap-fade to $66  sold this am at 68

Thoughts?  Perhaps i am crazy, but the chart is trendng down...

lets see what apple does.  cheers joe

Bought AAPL at 67.87. 

Stop: Below 64.35, the Right Shoulder of the Inverse H&S pattern 64.35. 

Risk: a loss of 5.2%

Daily Chart

joet,

That's strange...I looked for posts on AAPL...didn't see any....then did a search and just posted in another folder... then saw your post!

  Good luck.

New to selling short and chickened out... still a gainer covered at 67.30 from my 68 sale this AM.

technically it still looks to me that there are 2 gaps that need to fill,  April 19 65.65-66.20 and April 4 61.17 to 66.20  thoughts on this TA???

Melf Elf  on the longer time frame i agree that APPLE should be turning around, they have so much good news comming out, and even though the ipods may be slowing the new machines are innovative and run both PC and MAC operating systems... fantastic    (but i do not have the funds to hold long

For me this is strictly a day play as it goes, i could not watch the computer and when i had to go to work ot looked like 67.25 might have provided support so i set my limit at 67.30...  i originally had a goal of 66.00 but did not  want to risk holding over the weekend...  Will see where it opens monday, i may try another short as i feel it will fill these gaps... but selling off after hours perhaps gap down....

Anyone else with apple thoughts or TA hints for short plays? 
Cheers Joe

Quote from: joet on April 21, 2006, 11:00:01 PM
technically it still looks to me that there are 2 gaps that need to fill,  April 19 65.65-66.20 and April 4 61.17 to 66.20  thoughts on this TA???

joet,

My thought is that if the 61.17 gap gets filled, I'm going to be stopped out.    

QuoteWill see where it opens monday, i may try another short as i feel it will fill these gaps... but selling off after hours perhaps gap down....

Gaps are a pain in the neck.  Often, we will hear or read that "Gaps ALWAYS get filled."  Not true.

Example: Many internet-related stocks gapped down when the bubble burst. and we know that at least some of those gaps never will be be filled, because some of those companies no longer exist.

1. Sometimes, gaps are filled immediately.  A "Gap To Crap," then the stock comes right down that very day, or within a few days, and fills the opening gap.

Example: AAPL, on April 20, 2006.  Basis the daily chart, the earnings gap already has been filled.  The bars on the daily chart don't show a gap (there's still the gap that you're looking at on the intraday chart, however, from the April 19 close of 65.65).

2. Sometimes, gaps aren't filled for days, weeks, or months.

Example: AAPL, on January 19, 2006, when it left a gap from 81.85-81.66.  Anyone thinking that that gap "had to be" filled before the stock had a serious selloff is still waiting, three months later.  Meanwhile, AAPL had a 33% correction from the January high to the March low.

3. Sometimes, gaps aren't filled for years, if ever.

Example: AAPL, in April, 2003, left a gap from 8.90 - 9.81.  Unless AAPL crashes, it's going to be awhile until that gap gets filled.  (AAPL also has some other gaps back at $20 and $40, roughly).

Just thought I'd address gaps since you mentioned that you're new to shorting, in case you thought that these recent gaps in APPL "had to be" filled in the short-term.  They don't.

Just as it was "much more bearish" for APPL to leave that Bearish Island Reversal Gap on the chart in the Head of the H&S Top in January, it would be "much more bullish" if APPL doesn't fill the $61-$64 gap here, and then breaks out above the neckline of this "possible" Bullish Inverse H&S pattern.

Good luck!

EDIT: joet: If you have any response, would you mind switching to the "AAPL Of My Eye" folder so that we don't have more than one folder going on the same stock?  It gets confusing later on, if we want to refer to something, and have to try to figure out where we posted it.  Thanks.

EDIT: joet: If you have any response, would you mind switching to the "AAPL Of My Eye" folder so that we don't have more than one folder going on the same stock?  It gets confusing later on, if we want to refer to something, and have to try to figure out where we posted it.  Thanks.

Howdie Elf,
Thank you for the reply, i will keep it on this thread about AAPL now
I see what you mean about gaps...  July 12, 06   gapped 37 up to 40 and has never been filled, sure hope that it does not.
Your point is also well taken about the power of a bullish gap, like that one in July, this one does not appear to have the power along with it, that is why it seems that it may fill to $61 before the up trend break out...  the reverse head and shoulders looks strong... can you provide more incite into this TA pattern.  with the 30th anniversary and possible product surprises comming soon i believe that AAPL will be going up again, just trying to decide when to enter.
Have you seen these patterns play out as expected for you?  The reversal pattern would mesh well in this case with good news in comming weeks and could well make that $86 prediction a possibility....
Does the after hours selling mean anything to you?
Cheers Joe

Quote from: joet on April 22, 2006, 02:17:43 PM
this one does not appear to have the power along with it, that is why it seems that it may fill to $61 before the up trend break out...

joe,

That certainly could be right.

Coming off the 57.67 low, the high, prior to the April 5 and April 6 gaps higher back to the neckline,  was 64.12 ( see chart below).   

From the neckline, AAPL sold off and put in the 64.35 low, not quite filling that 64.12 gap.  I view that as more bullish if it doesn't get filled, because it tells us that buyers are having a difficult time getting long at or near that gap.  If it becomes easy to get long there, then it isn't as bullish.

Quote
the reverse head and shoulders looks strong... can you provide more incite into this TA pattern.

It can still be bullish if the 64.12 gap gets filled, but part of the strength of a Reverse/Inverse H&S lies in the fact that the low of the Left Shoulder (the February 10 low of 62.90) shouldn't be taken out.  Buyers "should be" more anxious to step up on this pullback from the neckline (Right Shoulder) than they were in the Left Shoulder. 

If 62.90 gets taken out to the downside, it still can turn out to be bullish.  It just isn't an Inverse H&S pattern.  APPL, for example, could put in a double bottom at 57.67, etc.

QuoteHave you seen these patterns play out as expected for you?

Sometimes to the exact penny or two.  Other times, the target isn't achieved, or it can be exceeded by a lot.

For example, the H&S Top (pattern in red) target is 55.25 (you can see it on the chart, below the neckline), and it still is IN PLAY unless/until AAPL breaks out above the neckline of the Inverse H&S pattern (in green). 

The low so far only is 57.67, so if AAPL breaks out to the upside, the target didn't make.  If that turns out to be the case, we can observe that the 200DMA came into play, and that buyers were willing to step up there, after the 33% decline off the January high.

Note that the Bearish Rising Wedge targets of 62.90 and 60.23 both MADE, though.  Sometimes, a couple/few targets get MADE, and you only get "most" of the final target, particularly when that target is against the dominant trend, as in this case.  The dominant trend in APPL is bullish.

Quote
The reversal pattern would mesh well in this case with good news in comming weeks and could well make that $86 prediction a possibility....

I know what you mean, but just for clarity, I don't view pattern targets as "predicitions," but more as what the pattern suggests, strictly as a technical measurement.  In this case...

The distance from the neckline to The Head (57.67), added back to the point on the neckline where the upside breakout occurs.  That gives us a target of 86.00+  IN PLAY, "if" it breaks out.  That's what that particular pattern breakout suggests, technically.  It's "what we're aiming for," so to speak.  But, no guarantees, of course.

I make that distinction because I make a specific point of staying out of the "prediciton game."  That gets my ego too involved with "being right."  I have absolutely no idea what any stock is going to do in response to earnings, any news, etc., so I try to be as objective as possible and follow along,  as best I can. 

Quote
Does the after hours selling mean anything to you?

In general, no. 

Good luck, Joe!

Quote from: Melf Elf on April 21, 2006, 10:25:57 AM
Bought AAPL at 67.87. 

Sold ½ APPL at 71.50 near the neckline, which is at 71.559 today. Gain: 5.3%.

Quote from: Melf Elf on May 01, 2006, 11:21:59 AM
Sold ½ APPL at 71.50 near the neckline, which is at 71.559 today.

The high on the day was 71.54, validating the neckline.  Close: 69.60.

Quote from: Melf Elf on May 02, 2006, 06:17:06 AM

The high on the day was 71.54, validating the neckline. 

APPL just printed 71.55.  That's a technical breakout above the neckline of the Inverse H&S pattern (see daily chart above).

Quote from: Melf Elf on May 02, 2006, 10:33:09 AM
APPL just printed 71.55.  That's a technical breakout above the neckline of the Inverse H&S pattern (see daily chart above).

AAPL closed the week out at 71.89, technically above the down sloping neckline of the Bullish Inverse H&S Bottom.

The first data point on the neckline, the high of February 24, was 72.89, which also was the high of a Bearish Rising Wedge after the breakdown of the Bearish H&S Top, prior to the drop to 57.67.

The print high this week was 72.89 exactly.  That number "should" bring buyers in if it's taken out, on a print of 72.90.

I like APPL's chances here.  It's had a breakout of a four-month Bullish Inverse H&S pattern, going up against only a two-month H&S Top.

I sold ½ my APPL for a 5.3% gain (posted above).  My stop on the other ½ postion remains below 64.35, the low of the Right Shoulder, which would result in a loss of 5.2%.  That's a break even on the trade if I'm stopped out of it (barring a gap down, of course).

Quote from: Melf Elf on May 06, 2006, 07:33:14 AM
The print high this week was 72.89 exactly.  That number "should" bring buyers in if it's taken out, on a print of 72.90.

I like APPL's chances here.  It's had a breakout of a four-month Bullish Inverse H&S pattern, going up against only a two-month H&S Top.

There's 72.90 near the open.   Now, APPL needs to build on that.

Quote from: Melf Elf on May 01, 2006, 11:21:59 AM

Quote from: Melf Elf on April 21, 2006, 10:25:57 AM
Bought AAPL at 67.87. 

Sold ½ APPL at 71.50 near the neckline, which is at 71.559 today. Gain: 5.3%.

Sold remaining ½ position at 68.34.  Gain: 0.7%

Gain on the trade: 3%.

Quote from: Melf Elf on May 15, 2006, 09:49:40 AM

Quote from: Melf Elf on May 01, 2006, 11:21:59 AM

Quote from: Melf Elf on April 21, 2006, 10:25:57 AM
Bought AAPL at 67.87. 

Sold ½ APPL at 71.50 near the neckline, which is at 71.559 today. Gain: 5.3%.

Sold remaining ½ position at 68.34.  Gain: 0.7%

Gain on the trade: 3%.

What looked like a nice Inverse H&S breakout less than two weeks ago has resulted in downside takeout of the Right Shoulder (64.35), so I would have been stopped out.

The breakout was a fakeout.  The takeout of the Right Shoulder also could be a fakeout, but it invalidates the pattern. 

APPL could rally here off its 200DMA and put in a "new" Right Shoulder above 62.90, which was the low of the Left Shoulder, but that was an ugly move down from the "fakeout breakout" high of 73.80 on May 8 ,to yesterday's 63.12 low.