We do love Apple.  We have made dozens of studies of it and use it as an example all the time.  For some weird reason we have never owned it, although our analyses have been extremely accurate.  Just one of those funny things like loving Sandra Bullock, but never owning her.

Lately the punditry has been hyping Apple — always a bad sign –predicting absurd long term prices.  As everyone knows we are not afraid to jump on an advanced trend (though we probably should be sometimes).  But before taking a bite out of Apple you should look at the long term chart, which shows AAPL near important highs.  Ironically it would be safer and more conservative to buy it when it clears the highs rather than now.

In fact if you are long you had best look to your stops.  Look at this close up of recent activity:

Apple gaps a lot.  If we were    a betting man we would bet that last gap is an exhaustion gap and that Apple is more likely due for a downwave than a continuation.

For those of our readers who are gambling men a short here is really not so risky, because you put a stop 1 or 2 % over the highs and you’re out.  As always you scale in, and if the gap does get closed on strong activity you add on.

How do you like them apples?