Possible Bull Flag Continuation Pattern in Apple (AAPL)

World market are mixed this morning, with Europe down small and China actually bouncing around 2% after some very weak export data. You can interpret that bounce in a couple of ways: 1) the weak data has people expecting intervention from the PBOC, or 2) very bad data was already priced in, so it is a relief for the market to finally just have it out there.

S&P futures are down small after a big four-day move off June lows of 1560ish. At this stage, some digestion would be nice as our markets are a bit short term overbought. The S&P has some upper-level support at 1644-1642. If we can hold above this area, the pace of the bounce could remain intact. The 1634-1632 level is bigger support with the 50-day moving average down at 1627. Pivot resistance is 1654ish, then there are some resistance points at 1661, 1669, 1674, and intraday highs at 1687.

Recently there’s been a lot to like for the bulls. The Russell 2000 is at new highs and the Nasdaq is at 12-year highs. We have seen some catch up moves by laggard groups like the OIH’s, XHB’S and MOO’s. I know volume has been somewhat low, but it’s been that way for a while and — it’s the Summer. There is movement, even if most of the movement in the S&P has been overnight. A softer/flat open is welcome sight now.

High beta tech takes turns with opportunity.

AAPL has a really nice set up. It had a nice move off the lows and just digested for a four sessions, creating a potential Bull Flag continuation pattern. A new buy area stands at $423.50-$425. A close above this level opens the door for a potential move back to $434. So far the Red Dog Reversal at $393 has worked well. For this to maintain momentum, it could hold $415-417ish.

GOOG is still best in breed, but needs to do some work above $897 before it can go again, in my opinion.

AMZN provided us with two nice pivot action areas: $272 then $285ish. Now it’s above $290 and still looks good.

NFLX was the subject of Marc Sperling’s Trade of the Week newsletter on Monday. The trade idea triggered with two nice buy entries at $228 and $235. Now it’s at 2013 highs. It’s hard to chase here, but looks good.

YHOO woke up again yesterday and looks like it could be ready for 2013 highs again. A trade through and close above $26.70 could help that cause.

MSFT’s pattern is trying to tighten again. I’m not sure if it can get momentum again, but if it does, it will need to trade through and close above $34.60.

LNKD could be worth a look to buy the dip around $186.26ish.

FB has seen a nice two-day move and closed above its 50-day MA for the first time in a while. It still has some room to the upside.

Oil continues to move higher. Some names in the XLE and OIH have started to move better. OIH just had a four-day move and could use a rest as it’s a bit extended, but this move put some names back in play like BHI, SLB, HAL, ESV, XOM, CVX .

The ags also have been bouncing back since we profiled them in the Morning Call last Wednesday. Jill Malandrino from theStreet’s OptionsProfits stated this is their “time of year,” and so far that has been timely. MOO broke above $51.45 and filled a gap from 6/20. It has some room to bigger resistance at $53.25-53.50.

The metals continue to try to build lower support.

GLD, if it can get and stay above $121.77, perhaps could make a move up to $124ish over a little time.

SLV also held above the 6/27 low and could work a bit higher. Above $19-$19.19 I could potentially look for a cash flow trade up to 19.45 or even $20+ .

FOMC minutes are at 2:00 PM ET so be aware that they could create some volatility, especially in the TLT/TBT bond ETFs. TBT is trying to hold its gap with support at $74.64ish.

About Scott Redler 367 Articles

Scott Redler is the Chief Strategic Officer of T3 Live. He develops all trading strategies for the service and acts as the face of T3 Live. Mr. Redler focuses on thorough preparation and discipline as a trader.

Mr. Redler has been trading equities for more than 10 years and has more recently received widespread recognition from the financial community for his insightful, pragmatic approach. He began his career as a broker and venture capitalist where he was able to facilitate relationships that led him into trading. Beginning his trading career at Broadway Trading in 1999, Mr. Redler moved on with Marc Sperling to Sperling Enterprises, LLC after establishing himself as one of the best young traders in the firm. As a manager at Sperling Enterprises, continued to trade actively while working closely with all traders in the firm to dramatically increase performance.

Mr. Redler has participated in more than 30 triathlons and one IronMan, exhibiting a work ethic that also defines his trading. His vast knowledge and meticulous attention to detail has led to regular appearances on CNBC, Fox Business, Bloomberg, and he is a regular contributor to Minyanville and Forbes’ Intelligent Investing blog. He has been quoted in the Wall Street Journal and Investor's Business Daily, among other publications.

Scott received a B.B.A. in Marketing/Finance from the State University of New York at Albany, graduating Magna Cum Laude from Albany's School of Business.

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