This may be controversial here, but given that the market is locked in a short "chop zone" over the past six trading sessions, we are looking to Apple (AAPL) as a barometer for the market. We think that if the market has the potential to break down through its 200-day moving average and commence a new leg down, obviously just a probability at this precise moment in time, AAPL would be a type of "index" short with the idea of the stock testing its 200-day moving average, a break down off the 52-week high of 644 of about 26%, well within the parameters of a normal correction and base-building process for a leading stock during a bear mnarket. Keep in mind this remains hypothetical and is based on the market breaking down, hence is a potential tactical short trade to keep in your quiver, such that whatever you are tracking to indicate building weakness in the market, the trade could be made if condition #1 is met: that the market be rolling over with volume picking up.
Otherwise, AAPL could continue building a base along current price levels if the market remains indecisive, and potentially could become a buyable situation if it ever issues a pocket pivot on a move up through the 50-day moving average and/or the 10-day moving average.
We expect to be working this potential trade in AAPL should our indicators for determining whether condition #1 is being met confirm.
This information is provided by MoKa Investors, LLC DBA Virtue of Selfish Investing (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. Reproduction without written permission is strictly prohibited and will be prosecuted to the full extent of the law. ©2020 MoKa Investors, LLC DBA Virtue of Selfish Investing. All rights reserved.