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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...

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Time to Short Apple? (AAPL)

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 Best of Benzinga