Published : January 18 2011 at 15:06 ET

The concerns over the health of Steve Jobs caused a gap down today in AAPL. However, it was pointed out by one of our members who is a medical doctor during today's webinar that Jobs' form of pancreatic cancer may not be lethal, even though most forms usually are lethal.

Further, large companies usually have someone in the wings to take over should the health of a key member fail. All that is to say today's gap down in AAPL was probably an over-reaction to the situation, as the stock has clawed back nicely in front of earnings. Today's action will qualify as a pocket pivot based on the huge volume and long downside "tail" as long as the stock closes above the 10-day moving average at $340. The higher up in its price range that it closes today the better, and the price/volume action could be a clue regarding this afternoon's earnings report.

Should AAPL gap up after it reports earnings, it still could be buyable. But over the last 6 earnings reporting periods, only one gap up was buyable that day (7/22/10). The other gap ups did not work so well, thus one was better waiting for the stock to consolidate then buy on the pocket pivot.


This information is provided by Virtue of Selfish Investing, LLC (VoSI) is issued solely for informational purposes and does not constitute an offer to sell or a solicitation of an offer to buy securities. Information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of available data. VoSI reports are intended to alert VoSI members to technical developments in certain securities that may or may not be actionable, only, and are not intended as recommendations. Past performance is not a guarantee, nor is it necessarily indicative, of future results. Opinions expressed herein are statements of our judgment as of the publication date and are subject to change without notice. Entities including but not limited to VoSI, its members, officers, directors, employees, customers, agents, and affiliates may have a position, long or short, in the securities referred to herein, and/or other related securities, and may increase or decrease such position or take a contra position. Additional information is available upon written request. This publication is for clients of Virtue of Selfish Investing, LLC. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2016 Virtue of Selfish Investing, LLC. All rights reserved.