Notice the three Fibonacci confluence zones marked by the three red lines. These are zones the market has respected in the past. Although they seem very close to each other, they help me set entry and stop loss levels.
My entry was at $200, the middle Fib level (we shot past that today so I actually got an entry at much higher price).
The top level is where my stop loss would have been had I gotten an entry at $200. I am still using the top the level as a guide and setting my stop just above it. I know that if the market breaks this level, I am wrong and it is time to get out.
The bottom most level is currently my target. Notice the double top at $215 and how the Oscillator makes a second bearish reversal right at the double top. This is indicating that along with the Fibonacci and the price indicators, the oscillators are also pointing to a trend reversal.
Weekly Chart:
First, notice how the oscillator has made the first major bearish reversal since June 2008. This strongly suggest that there could be a serious pull back in AAPL.
Also notice the same Fib levels from the daily on this chart. Trace back to end of 2007 and mid 2008 and notice how the levels I drew held up nearly perfectly (blue rectangles).
My only concern as I entered this trade was that the price was edging very closely to my stop loss and a couple of times I definitely thought I would get stopped out. Also today price rebounded ~5%. This means that the hourly chart is showing strength (Indeed there is a major bullish reversal on the hourly chart oscillator).
In any case, I have entered a Put diagonal which you can see below along with the risk profile:
As I finish writing this, APPL's more than 5% gain today has diminished to around 1.7%. This means that the strength on the hourly chart has now been negated and of course also means that I making monies. Good thing too because I have been on a losing streak and I needed a good break!
- Wown
StockJockz.blogspot.com
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