Trade idea background
This trade idea update is a follow up to my original trade idea of August 21. The bearish picture for Apple (AAPL) is now even more negative after yesterday's market reaction to Apple's announcement about new products.
When I published the original trade idea Apple was trading at around 503. Now I recommend moving the stop from 514 down to 508 i.e. just above Monday's peak. The target at about 466 remains. However, the risk is that the stock could drop further in the coming weeks and therefore I would let the profit run. As I wrote in a story about Apple in November 2012 (A technical look at Apple stock - and the indicators are bearish), Apple could drop even further. If the stock takes out support levels at around 453 and thus breaks below the 200-day moving average then once again there is great risk that the 400 level could be penetrated, taking out the double bottom Apple made during the summer.
Trade management and risk description
Yesterday's candle was a bearish one. The sell-off was massive and had huge volume. A break below 486 will further confirm the bearish picture.
Trade idea parameters
Entry: Short at market or keep short position
Stop: 508
Target: 466
Time horizon: The expected lifespan of the trade is one to two weeks.
Short-term chart
