Key levels in Apple (AAPL)

Discussed in this article: Apple Inc ( $AAPL )

Let’s take a quick look at Apple ( NASDAQ:AAPL ) here. This stock peaked here, now it’s just been in consolidation forever, the challenge for a lot of people, as they’re still big fans of A-A-P-L and think that A-p-pl-e ( NASDAQ:AAPL ), some massive great wonderful product that they’re going to build, is going to propel the stock to new highs. It very well may do that, it may not, it’s not for me to say, but what is for me to say is this: the stock is not one that you need to be involved in right now. If you’re a long-term holder that’s great, long-term I think I’ll be able to buy it for 517.00 for a while. The stock needs to finish this consolidation and then push up. If it does not, if it starts to fall and actually fractures 500.00, if it breaks below 500.00, then this stock you know is in trouble. It’s cheap right now, I guess, I haven’t checked the valuations in a while, but all the real smart guys have been saying that Apple’s ( NASDAQ:AAPL ) cheap all the way down, so apparently it still is cheap.

Well it may just be getting cheaper, if the stock breaks 500.00, look where that is, it’s right here at this low here. If it breaks 500.00 it would also break the 200-day moving average, you don’t want to be long if that happens. So I’m not saying sell it now, what I’m saying is you’ve got to decide; if the stock breaks 500.00 do you really want to be long? Make that decision now, because if the stock does break 500.000 and you’re still long, you’re going to have a tougher time being objective; because you’re going to be thinking, well of course I want to be long, but if I’m not then I have to sell and then that means I take a loss, and I don’t want to take a loss on this. So make your plan now, before this happens, it may not happen, instead Apple ( NASDAQ:AAPL ) may breakout about 540.00. If it does, happy, happy, joy, joy you have a trade that’s working and Apple ( NASDAQ:AAPL ) looks like it’s going higher.

So what I would say is, right now the stock is in jail, between 500.00 and 540.00, I would want to wait for it to get paroled one way or another; be long here, frankly if it breaks down below 500.00 wait for a retest of that level, and then if it fails, if it starts to roll over again, there’s your short. An alternative short is this; if the stock does move up to 540.00 and then, rather than going through as I just discussed a possible scenario, instead if it moves up to 540.00 and then starts rolling over, that’s your short entry and you have your short entry with a buy stop right here, where if the stock trades higher you need to get out of that trade. So I hope this frames the analysis for Apple ( NASDAQ:AAPL ), just watch those levels.

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