Thursday, August 24, 2006

Trade of the Day - Apple Computer Inc. NASDAQ: AAPL - Midday Capitulation Play

Around midday AAPL capitulated on a huge volume spike. As soon as a reversal was confirmed, I took a long position. When a stock capitulates intraday, it sets up a reversal back to the base from where the selling began. As soon as price reached my target, I booked my profit. These types of plays, generally happen quickly so as soon as you see a huge volume spike at the end of an intraday price plunge, its time to find your entry point.


Glenn said...

Nice one Jamie, I was listening to my news, they mentioned the battery thing, I looked, I thought I should short it, then I thought I better not as I was unsure how much that mattered, then it tanked, haha. Was there not a chance of a continuation of the drop after a bounce?

TJ said...

Hey Glenn,
You're right the battery story isn't all that significant for AAPL. My gut tells me that if the market rallies tomorrow, so will AAPL. If, on the other hand, we have another weak chop chop session, AAPL could come under further weakness.

James said...

Great Post!!

TJ said...

Thanks James!
The great thing about this setup is speed. You can in and out in a relatively short timeframe and then move into something else.