Last week I wrote about Apple Stock and why you should wait for a reason to buy a stock. Have a plan of attack and know that you have done your best to make a good entry and plan for an exit if it goes against you. The last CBL line that we had drawn almost had follow through but it broke down and failed before we should have committed any money. So here we are again, bad news from Apple that they are scaling back production of the Iphone-5 because of demand. If I understand what I heard correctly, cutting production by 50%. News really doesn’t matter as far we are concerned, price action is what we want. As price falls and the down trend line continue to fall, we move our CBL buy line down with it. We wait for price to close above the CBL and then we buy the next day. The next item to be concerned with here is that solid red support line at $501-$502 area. You could bottom fish here and hope that it holds, but I do not bottom fish using support. I need to see some price action with rules. I need that CBL to be broken and held. I would like to see price also close to the upside on the upside of the downtrend line. Finally, I would like to see price close above the 50 day moving average, but not required for me. So in order in importance, CBL, Downtrend line, 50 day ma.
I would bottom fish with just a broken CBL.