Monday, January 24, 2011

The corrective pattern shown in the chart suggests AAPL could turn from the midpoint pivot, 325.50; but if not there, from the 'd' sibling at 318.60.  We can try to leg into a bullish butterfly spread if the lower target is reached, but for now, let's take a practice shot by bidding 325.54 for a round lot, stop 325.31. This stock can really move, so be sure to put your stop in before you bid it.  As implied, a decisive breach of the midpoint would tip the short-term bias negative. _______ UPDATE 11:07 a.m. EST): I've corrected the chart, which contained an erroneous point 'C'.  The new coordinates slightly lowered the target and the midpoint.  The former is still in play, but the latter has already been breached after initially having provided a fairly precise bounce overnight. Most immediately, there is a minor rally in motion that projects to 334.60.

Two patterns nicely visible on the 30-minute chart -- one small, the other large -- project to rally targets at, respectively, 1.3674 and 1.3789.  A bullish bias is suggested as the futures work their way toward these numbers, but either can be shorted with a stop-loss as tight as six ticks. ______ UPDATE (12:51 p.m. EST): The upthrust we were expecting carried to 1.3680 before settling back, but longs had plenty of time to implement a trailing stop to protect gains. Shorts from the target would be ahead at the moment if they used a stop-loss of seven ticks or more, since the high occurred exactly six ticks above the pivot.

It's about 3:22 a.m. Monday morning, and the March contract has stalled at the precise 1285.25 midpoint of a rally pattern projecting to 1292.50.  Above that number, especially on a closing the basis, the futures would be indicating 1305.75, the 'D' target of a pattern begun from 1258.00 on January 10.

The futures were working on a promising impulse leg around 2:40 a.m. Monday, but in this case I'd prefer using Fibonacci levels rather than  pivots to assess their progress, since the minor abc rally is likely to be spent by morning.  Specifically, a close above 28.280, representing a 50% retracement of the decline from last Wednesday's 29.490 high, would imply that bulls are fixing to take charge, at least for the near term.  More bullish still would be a move above the 0.618 Fib level, 28.570.

The February contract is up about ten bucks at the moment, doe-si-doeing Friday's range. We've seen similar rallies peter out, especially when they launched on a Sunday night.  However, this one would become credible from a Hidden Pivot perspective if it can punch through a nubbin of resistance at 1358.80 made Thursday in mid-plunge.  Night owls looking for camouflage entry opportunities should take note of the fact that tonight's so-far high surpassed by a crucial single tick a 1352.30 peak made Thursday on the way down.