AAPL beware of a lower high!

[Cobra]

AAPL weekly made a good bear signal bear, if a strong bear bar to break and close below the blue line the next week then we'll have a weekly lower high which could mean THE TOP was in for AAPL.

Why suddenly mentioning AAPL? Because the wall street has a saying: "As Apple Goes, So Goes the Market", so if the lower high can be confirmed the next week, then overall market might be interesting

[Cobra]

$AAPL, the rebound so far looks weak so might resume down?

[Cobra]

$AAPL is revisiting the previous low as expected. When test the previous low there're always some chances of double bottom but my guess is a breakdown is more likely.

[Cobra]

$AAPL made a good bull signal bar today while testing the previous low so some chances of a double bottom here.

The trade doesn't care about "some chances", it's all about risk reward ratio. Since the signal bar looks good, the stop loss is at the bar low, the target could be all the way to $190 even all time high which means far more than 2x reward to risk ratio, so for some traders, it's a go if tomorrow breaks above today's bar high triggering the buy signal.

[Cobra]

$AAPL, bad entry bar for bulls: It broke yesterday's high so triggered H1 long but the bar was a bear bar therefore reduced chances of a double bottom here. Fortunately there's a long lower shadow today so bulls may still have some chances, let's see the next Monday.

[Cobra]

$AAPL, the weekly, last week was a bear signal bear, breaks below the bar low this week is needed to trigger the L1 short which didn't happen so we'll need wait for the next week to see whether it will trigger the sell.

Personally, I'd like to see it breaks the blue line to be sure that there are indeed some chances of a weekly lower high here.

[Cobra]

$AAPL, the line has been test several times so could hardly hold another test, therefore a breakdown should be more likely now.

The breakdown would also be a double top (red arrows) breakdown so might be a sharp down. I'm not sure, just a mark here see so that later I'd know whether my theory works or not.

[Cobra]

Just a follow up, the breakdown from double top indeed was sharp down (not as much as I thought though). Now it's a falling wedge so not very bearish.

[Cobra]

$AAPL testing the falling wedge lower boundary, let's see any rebound here to confirm the pattern. Given the biggest red bar with volume surge today, maybe it has chance to rebound here.

[Cobra]

$AAPL, so far the falling wedge holds. Now testing the wedge upper boundary, let's see whether it'd fall all the way back to the lower boundary. Generally, I won't count on a trendline to work.

[Cobra]

$AAPL made a clear breakout so this bull shall have legs.

[Cobra]

$AAPL, beware of double top (red arrows) here. I say, 50% chances now. Trading is another story, betting on double top now might be a little late as the initial target is the blue line below while the logic stop loss would be the all time high therefore the risk reward ratio is 1 which is not good enough, maybe need wait for a rebound.

[Cobra]

Here's how risk reward ratio is calculated if short $AAPL here:

Assume short at weekly close $181.18, the stop loss would be the all time high which is $199.62 + 0.02 (usually is the 2x the bid ask spread), the target is $165.45 which is Oct 23 lows.

So

( 181.18 - 165.45 ) / ( 199.62 + 0.02 - 181.18 ) = 15.73 / 18.46 = 0.85

The risk reward ratio (actually should be reward to risk ratio, conventionally we call risk reward ratio which is not precise) so is 0.85 which is even less than 1, not good.

[Cobra]

Shorting especially betting on the reversal has very low successful rate therefore risk reward ratio at least should be 2 otherwise it'd be really really hard to make money.

While as the previous post calculated, the risk reward ratio is only 0.85, so not worth the bet.

[Cobra]

$AAPL, generally the rebound would be sold, but if another very strong bull bar tomorrow, I'd forget about bears.