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Warrior Trading Blog

Mike’s Trade Recap: $AAPL For The Win!

for the win

All right, good afternoon everybody. Well, a really great trade this morning on Apple. Found some momentum in the market after coming off a few days of being relatively choppy and not much follow through in the large gaps.

 

But today Apple was breaking down to a significant level, along with a market weakness, at least initially helped this trade really play out nicely.

One thing I want to share with you guys before we get started is the watch list I put out every morning for all of our members. Now, today’s watch list only consisted of Apple and I included all the key support, key resistance levels. Again, I do this for every stock that we have on watch.

Apple Stock Chart

Today, it was only Apple. I included the critical support pivot, which was 186, and 183.50 was the next support level after that. If we did continue to fade, we’d want to know what the next level is, and that’s going to be the recent gap entry at 170 at 17. The only resistance that was in the area was the 20 EMA, the daily 20 EMA, which was 186.39. And the additional notes section where I lay out the plan for this stock, what we’d like to see according to the technicals. Today was we wanted to watch for a continued fade only below 186.

What that means is we really don’t want to be involved with the trade until its below the 186 level. So this is a good guide for you guys, if you’re trying to remain aware of the levels on the stocks that we’re trading. It’s always good to keep this up and with in close reach so that you know what to look for when you’re trading. Today on Apple we had the 186 pivot marked out.

This was a very strong level for the stock. You can see there’s some very strong support through here where it consolidated for several weeks, then it broke out from that level making it basically the launch pad. This is the support level that we wanted to watch.

This morning, we were opening right on the support. So if that support broke, we would fade to the next support level, which is going to be somewhere in this 183.50. You could see it was a high wave back here. Once we broke and closed back over that, we came back and retested and held, and then moved higher. When you have that sort of breakthrough in retest, that’s going to validate the level. That’s why we had it as the next critical level of support on today’s watch list.

A couple items on Apple, you know, this thing had closed back below the 20 on Friday. We really wanted to watch this close because of what had happened in the past each time this closed below the 20.

Now if you look at the last few times its done this, right here in early ’18, early January, it closed below, made a move from 175 all the way down through 151. So, big move there. Next time, it closed below. Over here in March it closed below 176, faded all the way down towards 165. So another nice move.

The next time it did was the middle of April. Closed below 20, moved from 173 down towards 160, so another nice move. Now, it’s happening again, breaking below the 20 and closing below … on just last Friday, so judging from past price action, we can see that this thing starts to lose strength or become very weak once that event occurs. So being that that happened, I wanted to pay close attention to this, especially since the market was in alignment. It could have provided a really nice trading opportunity, to which it did this morning.

Being that we had a very strong support level here at 186, a couple things are going in is that you’ll have a lot of people watching this stock regardless, but today since it’s sitting on a very significant level, we’re going to have even more people watching it, and there’s a lot of people that would try to buy the support. A lot of people that are still long on it, once that support breaks, they will bail on the trade and stocks will fire.

So I was betting on a few things here in that the support was breaking, which was causing people to throw in the towel, long traders’ stocks were hit, which would accelerate the move, and that’s what we saw once we were able to get down below that 186 and start selling here and this [inaudible 00:04:23] started to roll over as well.

So everything was in alignment, which helped this trade play out really nicely. You can see right to the level that we outlined in the watch list, right to that 183 pivot, strong pop off that, and just been kind of trending back higher ever since. We’re back to that 186 pivot again. How do we trade this? Well, the market opened and I actually got short kind of quick. I saw a retest happen, and I was trying to get short, and I got filled at 185.55 and I wanted to see if we would just fade off of that because we initially opened up and we dipped.

If we look at a very fast timeframe, a 15 second timeframe, which is what I use for my entries, we dial this in and go back to the open. You can see the first flush that we had, and I was waiting for a retest after that first flush. That’s where I got filled partial position at 185.55. Now, it did pop against me, and I did get stopped on my first trade. But after I saw the price action play out for a few more minutes, I decided that I wanted to try it again because I was seeing the weakness come back into the stock, and the market was starting to roll over.

Let’s see if we can get this chart to load at the open, and we will break it down. Here we go. Here’s the open of the market on Apple. We start to break down here, and I was looking for just a quick retest. I was going to add into the retest as we came back up to the 186 pivot, and then hopefully have a really nice average near that pivot point and then we would roll over and fade. What happened was is we dipped right at the opening bell, I got short as it was coming back up 185.55, I added again at 185.90s, and again at 185.80s, and my average was right at 185.70s.

I said, “All right. This looks good. We’re starting to roll over here. If I look at this,” as I was watching it real time, “it doesn’t really get any better than this.” Test your pivot to the penny, starts to roll back over, and it looked like it was going to continue to fade. What happened was it caught support at this half dollar, and started to pop back up. It got through 186, and I said, “You know what? I don’t like it as much here, because it’s now broken back up above major pivot, and it’s starting to hold it,” and we only wanted to be short if we were below 186.

So, I decided to stop out. I stopped at 186.10 and took about a $0.30 loss and just sat tight for a few minutes and waited to see if I could some continued weakness come in. What happened here was the market started to look like it was topping out a bit, so I watched Apple for a few more minutes and I said, “All right, we’re back below the 186 pivot now. I’m going to get short again.” I got short right here as we got back below. We started to put in the pivot back below 186, and then we broke that pivot right here.

As we started to come in, I anticipated the break down, got short again at 185.90s, 185.80s, and then I held my position. We started to move around here a little bit, and the reason I stayed in at this point was because we made a lower high than we did over here, all right? So I wanted to see … this was the line in the sand to see if it would get above that, and I would stop again. Otherwise, I was going to sit tight with it and just let it play out, let the market weakness set in, and see if we could get this trade to roll.

What happened here was, again, we put in a lower high. Very important when you’re using a fast timeframe chart. Started putting in the lower high, then we retested the pivot right here again, really nice retest. Again, a lower high. I added to the position here as well, and then we started to fade. Right at this point right here, if you look at the market right around 950, about 20 minute in, I go back to a five minute chart and go to the [spy 00:08:20], you can see what happens.

So, 950 is this candle right here. We started to get this hard downstroke, we started to see some selling come back into the market, we closed below [inaudible 00:08:31]. That gave me additional confidence that this trade was now going to work because we have now seen the sellers come back into the market and they’re starting to try to push this thing lower. Obviously, being Apple, it’s going to definitely follow the market.

Back to Apple, this is where we were short right in through here, and then we got the continued fade. It really doesn’t get much better than this. It’s just a straight shot down right to our critical pivot level of 183.50 and we covered the balance at 183.48 is where I got filled on the balance. I scaled out along the way. I covered some at 185.10, more through the … the low at that time, which was 184, I covered more at 184.50 and then the balance at 183.50. All right? So, a really nice move there, and had a strong bounce off the pivot.

I was out of the trade at this point. I didn’t take the View App fade on this, which normally most of the time I would jump back in a trade like this because it’s got that really nice hard move down, and strong move back up, known as the V-Bottom. That’s the type of setup you want to look for on View App fades, is those V-Bottoms because those are the ones that produce. But today, what happened was since this is so tightly correlated with the spy, you see this bounce that we had on the spy back above View App, we started to push highs again?

I didn’t want to be part of Apple on the View App phase just because the market was pushing, and that was probably going to help keep Apple to the upside, or at least off the lows. I decided to sit tight and call it a day. I had a really nice trade on this Apple, and it just takes one. Great job today, every who traded Apple. We will back here first thing tomorrow morning.

Oh hey. I didn’t see you there. I was just working on the Dream Board for my next home run trade. Hopefully it comes soon. Until then, make sure you subscribe to get email alerts anytime I go live, or upload new videos. Until then, happy surfing.