Medium term
Trade view / 15 September 2016 at 13:09 GMT

UPDATE: First upside target on Apple reached

Trader /
United States
Price target:
Market price:

On Tuesday I outlined a trade view on buying Apple shares. The stock has since rallied 6% and reached my first price target. Through the lens of prudent risk management it is thus now time to take at least partial profits on this trade. 

In the bigger picture, this week's rally thus far in AAPL stock is confirming the breakout past diagonal resistance that we see on the longer-standing multi-year chart. If AAPL stock can close this week above the $109 area, then a confirmed breakout past diagonal resistance would take hold. This would then also put the stock back into "buy the dip" mode, as opposed to "sell the rally" mode.

Apple stock, long-term chart:
Apple Inc.
Source: Saxo Bank

It seems as though investors needed this past weekend to digest last week's new product announcements like the iPhone 7 because buyers came in heavily both in AAPL stock and its options on Monday and the three-day rally thus far has lasted right through Wednesday. While this is certainly a constructive three-day 8% rally in AAPL stock, the rally may be getting a tad too much in the near term.

Admittedly the upside price target of $110 that I laid out on Monday has been reached quicker than I anticipated. I am not complaining of course but at this juncture I would rather want to adhere to my outlined risk management process – i.e. take profits in the trade at current levels ($111–$112) and from a swing trading perspective. 

Apple Inc.
Source: Saxo Bank

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more
DudetteUK DudetteUK
Well done, inpressive trade
DudetteUK DudetteUK
Impressive sorry
Cat Cat
Thanks for the update.


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