Friday’s slight dip beneath p=111.85 will not necessarily be fatal, but it did shorten the odds of a further fall to D=100.99. If this comes to pass, Apple shares will have shed 27% of their value since peaking on September 2 at 137.98. The pattern shown in the chart is gnarly, with a one-off ‘A’ from the planet Mars, and that is why I expect it to work well for ‘mechanical’ shorting or bottom-fishing on the way down. Although the C-D leg has yielded no such opportunities so far, a rally to the green line Sunday night or Monday morning would trip a ‘mechanical’ short, stop 122.71. Alternatively, if the stock falls straightaway to p2=106.42, you could bottom-fish there with a tight ‘rABC pattern. ______ UPDATE (Sep 15, 4:47 p.m. ET): A head-fake on the opening triggered a mechanical short at 117.27, as shown in the original chart. The position was showing a $1440 profit on 400 shares toward day’s end, but this was only after the stock head-faked a second time, narrowly failing to surpass the early-morning high. I have not established a tracking position because only one subscribers appears to have done the trade, but the 100.99 target remains valid. If you hold a position, cover half at p=111.85, but make this o-c-o with a stop-loss at 122.71. _______ UPDATE (Sep 16, 5:08 p.m.): The 112.04 low is close enough to p that you could have covered half of the short position. If you haven’t done so already, I’ll recommend doing so now at around 112.57. The 100.99 target is still valid, but odds would improve if AAPL closes for two consecutive days beneath p=111.85. _______ UPDATE (Sep 17, 10:47 p.m.): To leverage the 100.99 target, I’ll recommend buying eight Sep 25 95/100/105 call butterflys for 0.30, good-till-canceled.
AAPL – Apple Computer (Last:110.35)