Apple Inc. (AAPL) is a stock I follow pretty regularly and as the stock market was bottoming in early June, I noted that AAPL had made its low in the middle of May, which was consistent with a market leading stock.
Even though the daily OBV was not impressive on June 11 I recommended Apple Inc. (AAPL) along with other big technology stocks. With AAPL closing at $580 I recommended going 50% long Apple Inc. (AAPL) at $566.80 and 50% long at $559.60 with a stop at $545.65 (risk of approx. 3.1%). The stop (red line) was placed just under the early June low of $548.50.
On June 28 (point 2), AAPL dropped to a low of $565.61 before a seven-day rally to a high of $619.87 (point 3). The stop was then raised to $564.80, which was just under the prior low. The sharp drop in the latter part of July took AAPL to a low of $570 (point 4) and tested the 50% Fibonacci retracement support of the rally from the May low to the July high.
When AAPL made a new rally high of $621.73 in early August I raised the stop to $575.64 (point 5) to lock in a small profit. While I was on vacation in August, AAPL made new all-time highs at $674.88, so upon my return I raised the stop slightly to $584.20, which was well under the psychological support at $600.
By the middle of September, AAPL made another new high at $685.50 (point 7), so I raised the stop quite a bit to $633.79, which was well under the late August low of $648.11. Of course, AAPL quickly pushed above the $700 level, hitting a high of $705.07, which was not far below my August upside target at $714.
APPL gapped lower on September 24, and heavy selling the following day (point 8) was a sign of weakness. Either closing out the position or using a tighter stop would have been a better approach than keeping the stop at $633.79, which was hit almost two weeks later, point 9.
In the retail space Macy’s Inc. (M) has always been one of my favorite stocks especially during the fall, which is a strong seasonal period for this industry group. Last July, there were some positive technical signs for the retail stocks like Macy’s Inc. (M).
The weekly chart showed that the 50% Fibonacci retracement support from the August 2011 low had been tested with the 61.8% support at $30.04. This was a classic example of how Fibonacci analysis can help you determine good entry levels when no one else is looking.
There was also good chart support from the July 2011 highs at $30.40-$30.65. At the time the relative performance or RS analysis had turned up from support after confirming the previous highs. The OBV was below its WMA but was holding well above support, line d.
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