The short-squeeze from Black Monday’s oversold low at 92 has been so vicious as to be almost convincing. However, signs continue to accumulate that Apple is no longer the world-beating company it was under Steve Jobs. Further evidence that Apple has grown more comfortable stagnating than innovating came over the weekend in the form of an obviously planted story in the Wall Street Journal. It described Apple’s collaborative efforts with Hermes to market a $1500 designer wristwatch. What’s next? Apple/Chanel handbags? A line of high-end towels and linens? Regardless, you can be sure that investors around the world are waiting breathlessly for the Cupertino-based firm’s next world-shaking product announcement. From a technical standpoint, the stock looks like it could go as high as 119.65 before the hot air runs out. Although a print at that price would generate a robustly bullish impulse leg on the hourly chart, we’d view it as a bull trap that begs to be shorted. If you care, stay tuned to the chat room for further guidance in real time. _______ UPDATE (September 20, 1:51 p.m.): The rally off (quasi-)Black Monday’s low is sputtering out with AAPL having gone no higher than 117.27. Rather than hoping for better prices to get short, we’ll have to take what we can get. At the moment, that would have meant shorting 113.13 on Friday afternoon (see inset, a new chart); or, belatedly, mechanically shorting 111.97 or 110.80 if the opportunity should arise. A more cautious approach would be to get long at D=109.63, and if the trade goes our way, applying the profits to cushioning the stop at the next shortable target.
