Trade Lesson: Apple Computer Rocks The Levels To Profit

The Apple Inc. AAPL chart has been truly one for the ages over the last month. The keys to the chart hearken back to their earnings release and how the stock traded after it. On July 21st, 2010, Apple gapped higher and collapsed back towards the flat line for the day. This was the reaction to the earnings news. The range that day was $265.15 to $254.24. For the next 14 trading days, Apple traded inside that range. This was interesting because Apple is not a tight range stock. What this told technical traders was that it was creating a tight range and was soon to breakout. The direction it broke out would dictate the next major move. Sure enough, Apple broke to the downside. After the break down, Apple started to consolidate. This showed technical traders a perfect bear flag formation that would soon send the stock lower yet again. The stock collapsed yesterday and today into the first major support line at $240.00. No sooner did it hit the support level, then it bounced back, erasing part of the losses for the day. This chart on AAPL diagrams perfectly how reading the technicals will tell you everything you need to know about the direction a stock will take. You can truly be on the right side of the trade. To learn more, join the Research Center and get swing trades, analysis and education. Gareth Soloway Chief Market Strategist www.InTheMoneyStocks.com see charts:http://www.inthemoneystocks.com/userfiles/image/AAPL08_24_10.jpg