Thursday, October 12, 2006

Trade of the Day - Apple Computer Inc. (NASDAQ: AAPL)

Daily Timframe - Yesterday AAPL carved out a NR7 bar on the daily timeframe on a test of support. My strategy today was a reversal long for AAPL off of the NR7 bar.

AAPL started trading up in pre-market so I placed a buy stop order on a break of the pre-market high. My target was resistance at $75.00. I was filled on the open and I exited my entire position as price rallied up to tag $75.00 shortly past 10:00. Notice the volume on the first three sticks as price moved towards $75.00, followed by a drop in volume as price pulled back and consolidated the move.

NR7 - My definition of NR7 is a NRB with the smallest real body over the last seven sessions. NRB with potential for reversal from support after an orderly pullback or consolidation.

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