Market Overview

Marketfy Maven

Sign up to get updates and product information from this Maven

Adam Beaty

Adam Beaty is more than just your typical options strategist. His passion for business and his entrepreneurial mindset have taken him on a stock trading adventure. Starting with only $500 in his...

>> Read more from this author

Product Performance

Time to Short Apple? (AAPL)

If there is one stock that people just love, it is Apple (NASDAQ: AAPL).

The company carries with it an enormous following of investors. For the most part it has been a great stock to own, until about a year ago when everything changed.

Time to think different

Apple came tumbling down from $700 to $400 in quick fashion. Since the beginning of 2013 it has really been in this range from $386 to $470. Apple has just come off the bottom of that range to make a run higher.

  

Apple is now running into resistance at $458. This run the stock has been on was enough to get it overbought on stochastics and outside of the bollinger bands. Bollinger bands are something traders watch to see if a run might be coming to an end.

They don't mark the top or the bottom of anything, but they are a good indicator to let you know a stock is getting stretched in one way or another. Seeing how Apple is completely outside of its bollinger bands is a good indicator that this run could be done.

Add that to the fact that traders are in resistance and there is a high reward/low risk short setup available.

This is a high-probability, high-reward and low-risk setup

Apple can be shorted under $452 with a stop above $458, a trade that is low risk. The target should be the earning's gap at $435. With the target and stop listed, it will give a 2.8 reward to risk ratio.

Tags: bollinger stochastic

Posted in: Short Ideas Technicals Trading Ideas