Some of us at SMM took a bite of the $AAPL today – November 17, 2021


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This is Scott with your Chart of the Day. I want to take a look at a trade that we took today over at Stock Market Mentor. At least I did and I think we had a bunch of members take part in this idea as well.

Last night before the close I was scanning my Watch List and I came across Apple ( NASDAQ: AAPL ). Apple ( NASDAQ: AAPL ) was just kind of hovering around here along the 8-day exponential period moving average. And I spotted out the fact that it’s holding up pretty well above the 50-day. Now, the 50-day is a pretty important institutional moving average.

A lot of times when you see Apple ( NASDAQ: AAPL ) around the 50-day, that is the time that you want to pay attention to Apple ( NASDAQ: AAPL ). As you can see back here it bounced around the 50-day moving average and that is when it was then off to the races. And so here we are again kind of hovering around that 50-day moving average.

So I was watching Apple ( NASDAQ: AAPL ) for something, some sort of direction within this consolidation. I then, also, was able to spot a little bit of a downward sloping trendline right around that zone and we have a clearly defined level of resistance. You can see how price got rejected there, there, there. And we just closed right under last night.

And so Apple ( NASDAQ: AAPL ) was on the top of my Watch List today because I know this is a very highly watched stock. It is one of the most liquid stocks in the market. And I thought, do you know what? If this is able to just kind of poke above this downward sloping trendline a bit, maybe, just maybe others will see this setup and act on it.

And that is exactly what happened today. You can see they did it on a nice pickup in volume here. So we have a nice downward sloping trendline, a breakthrough coming on higher than average volume, that is my kind of setup. I live for setups like this. And so a bunch of us took a bite of Apple ( NASDAQ: AAPL ) today and are riding this potential start of a new trend.

So we will be watching Apple ( NASDAQ: AAPL ) for the expected pullback to this breakout level because it does kind of do that. You can see how it breaks out, pulls back, moves higher, pulls back. And so we are moving higher again so we should expect a little bit of a pullback but if we see, for whatever reason, some more upside momentum in Apple ( NASDAQ: AAPL ), then I think watching this for a strong move above 155.00 could be a great spot for us to add to our current position.

Now, if you don’t have a spot in Apple ( NASDAQ: AAPL ) right now, then again, you would probably want to wait for that pullback to the moving averages and the expected retest of this breakout. But we don’t know what is going to happen. My main focus right now is just knowing what my options are within a swing trade.

If we end up pulling back a little bit I have the option to sell some into that weakness. And if we end up breaking out I then have the option to size into more of my current position. So as a swing trader, knowing what my options are and what I need to do if it pulls back or if it breaks out is really important.

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