AAPL YHOO TSLA C : It's always your call...

Don't let someone else tell you how to invest your money!

It's always your call...

• It is natural to look for an easy way to start investing.  Or an easy way to continue investing because you are tired of losing money.  What you really need is more knowledge.  More experience.  More time to learn.  And a good teacher.

• I am not saying you shouldn't subscribe to some investing service or some trading room.  All I am saying is that every time you spend your money it should be your decision.  You should know why you are hitting the "submit" button on that order.  You should also know when, and how, you are going to cut your losses if the trade goes bad.  This is not easy people.  All of us struggle with the reality that we made a bad decision.  And what if the trade goes good?  When do you get out??  Sometimes this is an even harder decision.

• If you are invested in AAPL or YHOO you may be wondering what to do now.  If you are not invested in anything but you want to get involved because "everyone else is making tons of money", realize that some people are making money.  But there are definitely some people losing money.  Even in this market which is at all time highs.

• Let me circle back to my opening paragraph for a moment.  More knowledge will come as you read more.  You have to learn to distinguish between facts and opinion.  More experience will come as you make more trades.  But it will likely come with a financial cost.  Unless you are "paper trading".  Let's be honest, paper trading is great when you can walk away from a "paper loss" and start over.  But paper trading SUCKS when you make a huge "paper gain" because you got a trade just right. 

• And about that good teacher.  Good Luck to ya.  There are some traders / investors out there that would make great teachers.  But they aren't accessible to you and me or they want more money every month than is affordable to most.  By the way, there is never a guarantee that you will make money.  And you can't expect one.  This market isn't a place where guarantees work. 

• So why am I rambling instead of showing charts?  The charts are next.  But investing is rarely like going to school and having someone show you exactly what to do.  You have to learn by taking little bits from many sources and putting the bits together to form a cohesive plan.  I hope this blog is one of your bits.

C  -  Citigroup
      It's your call...

This is a daily chart of C

Click the chart for a larger chart of Citigroup

• Citigroup has been in a range (between the two gray horizontal lines) since about March of 2013.  The price did dip below the range once in 2013 and rose above the range once in 2014.  You will need to look at a 2 yr chart to see it clearly.

• What I am trying to show you is two things.  1) The lows have been getting higher & higher since April of 2014.  Notice the green uptrend line that touches the lows.  2) The price just approached the top gray horizontal line and now looks like it is heading lower.  Notice the short red downtrend line that touches the highs. 

• If you want to invest in or trade Citigroup you have a decision to make.  If you think it will go up from here then it needs to stay above the 21 ema (yellow).  If you think it will go down from here then is has to stay below the red downtrend line.  It's your call...

TSLA  -  Tesla Motors Inc

      It's your call...

This is a daily chart of TSLA

Click the chart for a larger chart of Tesla

• Tesla has been following the same uptrend line (UT 1) since mid 2013.  Going long when TSLA is close to UT 1 has been a great investment.  Take a look at a daily chart that includes all of 2013 and you will see what I am talking about.  

• I know there are several lines on this chart so it may seem confusing at first.  But let me explain...  If a trend line doesn't have a UT or DT label then ignore it.  Those are old trend lines that I am not talking about in this post.  I guess I could have removed them but I didn't.  Focus on DT 1, UT 1, and UT 2.  We have already talked about UT 1 and how it has been intact for about 1.5 years.  UT 2 has only been intact for about 3 weeks.  But it is crucial that you realize the price of TSLA is following UT 2 at the moment.  DT 1 was intact for all of September & October.  What is important about DT 1?  The fact that TSLA's price is now above it.

• How do we invest or trade TSLA from here?  If you think it will continue higher then it has to stay above UT 2.  If you think it will go down from here then I guess it has to stay below the gray horizontal line.  

• If you were short while TSLA was following DT 1 then you should have exited that position at the beginning of the week.  If you were waiting on the sidelines for a hint that TSLA was done going down, that hint came at the beginning of the week when the price closed above DT 1.  

If you initiate a trade right here, 

how do you know if you made a bad decision?

• One way is to only allow 3-5% of your money to be lost.  But that is arbitrary and only you can make that decision.  I like the range but if you don't enter a trade at the right time you could loose every time.

• Another way is to use a trend line.  If you feel TSLA or C are following a particular trend line and that trend line is breached, then you should get out of the trade.  What about the percent range?  You would've known how many percentage points you were risking before you entered the trade because you know where you were buying and you knew the price level of the trend line at that point in time.  If you weren't willing to risk that many percentage points then you shouldn't have entered the trade.

• Let's look at C first.  If you go long right here, you have to realize that C could go all the way down to the Uptrend line...  Ouch!!  That is a drop of about $4 from here or 8%.  Not my idea of a good entry.  If you go short right here, you want the price to stay below the red downtrend line.  Which is about $0.60 above Friday's close or 1%.  I can accept that kind of risk.  Either way you have to constantly evaluate your trade.

• Let's look at TSLA.  It you go long right here, the price has to stay above UT 2.  If it crosses below UT 2 you should sell because chances are good it will go to UT 1.  You could buy it back when it gets there.  If you go short right here, I would call you crazy  :)  But seriously, I would wait until the price closes below UT 2.  If it gets that low, watch for a turn back up at UT 1.  If it gets below that, I will short it with you...

Anything can change at anytime!  You have to constantly evaluate your trade.  If it is working, hang in there, adjust your trend line, and be patient.  If the trade is not working, get out of the way!  Don't be patient, don't hang in there, don't adjust your trend line.  You can always try another trade later on down the road if you still have money left because you were disciplined enough to get out of a bad trade...

Trade what you see...  Not what you think, or feel, or hope, ...

The trend is your friend... Until it's not.

Limit Risk & Protect Profits!

Quick Post on YAHOO! ($YHOO)

Everyone is talking about YHOO & AAPL this week.  As you may have noticed, my last couple of posts have focused on the trend lines in weekly charts.  For a change, here is a quick post on an hourly chart of YHOO.

YAHOO!  (YHOO)

Here is an HOURLY chart of YAHOO!



Click the chart for a larger chart of YHOO



• Remember this is only an hourly chart.  Why would I repeat myself?  Because an hourly chart gives very short term signals that may not last very long.  But the trend lines look the same on short term charts and long term charts.  Just remember where your signal came from and you will be ok.

• Inside the shaded box - Notice that YHOO crossed above the red DT line yesterday afternoon.  The opening candle of today tested the red DT line but didn't break it.  That was a good indication that it could be bought.  Small size initial position was prudent.  The opening candle high of today also matched the top of a candle from yesterday afternoon.  So that tells us there is some resistance at $43ish.

• UT 1 has been a good trend for a week now.  I like it as my "line in the sand".  But it is interesting to note that, after yesterday's low, UT 2 began to take shape.  It is well defined at this point and can be used as a "tight stop". 

• Although these are short term signals only to be used for short term trades.  If you want to try one you could go long close to but above UT 2 and use UT 1 or UT 2 as your stop.  If the trade doesn't work out just get out of the way.  If it does work out, you may have a descent winner on your hands.

• Things to look for...  There is resistance at $43ish so expect some turbulence there.  The price of YHOO has to stay above UT 1 to stay in the trade.  Once YHOO gets above $43, I would expect it to go to $44ish.  There may be some turbulence there too as it would match the high from a couple days ago.

Trade What You See...  Not what you think, or feel, or hope, or ...

The Trend Is Your Friend... Until Its Not

Protect Profits & Limit Risk

Z, WFM, TRIP, AMZN, TSLA, AAPL : Selling Short & Buying Puts - Sept 12 Update

Let me begin this post by saying THANK YOU!

 

Last week's post was the most read of any of my previous posts.  I have to be honest, I am not sure why.  But none the less, I am thankful that so many of you took the time to read the post.

 

If you want to read last week's post, click here

 

I am going to update all the charts from last week and add a couple more.  I watch about 45 stocks each week.  So there is plenty to choose from.  I really love investing and I love sharing what I see.  I hope what you read here helps you in some way.

Zillow (Z)

 

Here is a Weekly Chart of Zillow

Click the chart for a larger chart of Z

Last week I talked about the weekly candle closing below UT 2 and that it may indicate lower prices for Z.  We did see lower prices for Z this week.  This week's candle closed right at the 21 week exponential moving average (ema).  Remember that moving averages are places where prices can turn around.  So be ready just in case.  Use stops to limit your risk.  Since we are talking about following DT 1, it makes sense to have a tight stop at $133ish and a line in the sand at $137ish.

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Whole Foods Market (WFM)

 

Here is a Weekly Chart of Whole Foods Market

Click the chart for a larger chart of WFM

Last week I gave some levels to watch and use as stops if you think WFM is going lower.  Everything still looks good.  Stick with the plan. 

• WFM is going sideways for the most part and has been doing so since the big drop in price a few months back.  Sideways movement is "consolidation" or indecision on the part of investors.  For whatever reason, there are investors out there willing to buy at $36ish but feel compelled to sell at $43ish.  You could always just play along while it goes sideways in the channel.

• It is noteworthy to mention that WFM has been making steady gains over the last several weeks.  But this week was a red week.  I would also point out that WFM broke the most recent uptrend line (not shown) that started at the beginning of August.  This could be a sign that we will see $36ish sooner rather than later. 

______________________________

Trip Advisor  (TRIP)

Here is a Weekly Chart of Trip Advisor

Click the chart for a larger chart of TRIP

 

TRIP doesn't look quite as negative now as it did last week.  It is still below UT 1 but it saw lower prices during the week and then was able to recover from them to close near the highs. 

 

• One thing to note is the high of this week never got as high as the previous week.  Yes it was only $0.23 away.  But it is a moral victory if nothing else.  Lower highs & lower lows are important if your are betting TRIP will continue lower.  TRIP is still below DT 1 so feel free to play it to the down side.  Just remember to use stops to limit your risk.  I would have a tight stop at $100ish (top of the 9/5 candle) and a line in the sand at $102ish (half way up the 8/29 candle).  If it tests DT 1, you may have another opportunity to play TRIP to the downside.  If it goes through DT 1, you still have $ to begin a long position. 

 

_____________________

 

Amazon  (AMZN)

 

 

 

Here is a Weekly Chart of Amazon

 Click the chart for a larger chart of AMZN

 

 

I feel like I cheated all the people who read last week's post because I didn't include this chart. 
I talked about it but that was all.  Here it is in all its glory.

 

• This chart is one of my favorite charts at the moment.  It is a clear example of  UT vs DT.  Which will win?  Say what you want about AMZN but the price has gone up for two years!  It is hard to argue with that.  If you like fundamentals, you probably have many arguments about AMZN.  Remember, I am a technical investor.  I trade what I see.  At the moment, the only thing I know it AMZN's price will break either UT 1 or DT 1.  When it does, I will be ready to follow it.  Which way?  It doesn't matter.  I know how to make $ either way :).

 

• Speaking of trading, I want to remind you that speculating is not technical analysis.  If you buy or sell short now, while AMZN is between UT 1 and DT 1, you are speculating.  Technical analysis says wait for a break above DT 1 to go long or wait for a break below UT 1 to go short.  I encourage you to wait...

 _____________________

 

 

Tesla  (TSLA)

 

Here is a Weekly Chart of Tesla

Click the chart for a larger chart of TSLA

 

TSLA : Too far too fast.  The multiple is unsustainable.  The valuation is absurd.  Even Elon Musk is cautioning investors that, in the short term, TSLA's stock price may be too high...

 

• Everything in the previous paragraph is a "fundamental" view of TSLA.  Technically, if you bought TSLA in early 2013 you are VERY happy!  Now "technically", how do I get into TSLA so I can get happy too??

• TSLA is obviously following an uptrend line (UT 3).  How long will it continue?  No one knows.  But if you want to try to "get happy" you could begin a long position right here and stay in it as long as TSLA stays above UT 3.  You will need a tight stop because if TSLA closes below UT 3 it could go to UT 2.  If it gets there, I would rather lose a little bit of money with a tight stop at UT 3 and then retry a long position at UT 2 instead of being way underwater at UT 2.  A $40 loss is never a comfortable position to be in.  UT 2 is $40 below UT 3 at this point...

• Another feather in the cap for anyone who wants to be long is that TSLA closed above "all time highs" 3 weeks ago (on the 8/29 candle).  Many times, when a stock closes above all time highs, it will continue higher. 

• One more thing about TSLA.  Notice that this week's candle is "inside" the previous week's candle.  So if it gets above this week's high of $285.49 you can expect it to go higher.  If TSLA goes below this week's low of $273.66 you can expect it to go lower.  Remember there are no guarantees in investing.  But the "inside candle" rule is a great indicator.

___________________________

Apple  (AAPL)

 

Here is a Weekly Chart of Apple

Click the chart for a larger chart of AAPL

 

 AAPL is a great example of a stock in an uptrend.  How can I say that if there are no trend lines drawn on the chart? 

• Let's talk again about moving averages.  There are 4 of them on this chart of AAPL.  They are the 8 exponential moving average (ema), 21ema, 50ema, and 100ema.  If you are long a stock, the moving averages should be in order.  The 8 above the 21, the 21 above the 50, the 50 above the 100, and the 100 above the 200 (not shown).  This is a weekly chart so these moving averages are "weekly moving averages".  As opposed to daily moving averages or hourly moving averages. 

• Starting in May of this year, AAPL's chart turned a corner.  Although the moving averages have been properly aligned for almost a year, the price of AAPL didn't give a clear picture.  Notice that the price has closed above the 8 week ema every week.  There have been a couple weeks that closed right on the 8 week ema, but those were just great buying opportunities.  This week we see the same scenario.  AAPL closed right on the 8 week ema.  If you wanted to get long AAPL this may, again, be a great time to do so.  IF the stock price reacts like it did in the past, we should see higher prices next week.  Remember, the past is not always an indicator of the future...

• If I started a long position here, I would have to be willing to lose a little money and sell if the stock closed below the 8 week ema (currently $98.81).   If a new long position didn't work out right here, I would probably wait for AAPL to close around the 21 week ema.  Then I would try again.  Remember, stocks can turn around wherever they want.  Moving averages are potential places but there are many others too. 

• If you are one of those who is thinking about playing AAPL to the downside, you could try it after the price closes below the 8 week ema.  At that point you should be able to draw a DT line and use it as your stop.  You could also use that same 8 week ema as your stop.  This is just my opinion but there is a lot going on with AAPL right now that is potentially positive.  Personally, I would be hard pressed to try a short position.  I think I would rather stay away from the stock versus shorting it.  By the way, I don't use an iPhone.  So that is not clouding my judgment.

______________________________

Trade what you see... Not what you think, or feel, or hope, or ...

The trend is your friend... Until its not

Limit risk & protect profits

 



Apple Inc (AAPL)

I am going to start this post by giving you a longer view of Apple Inc. 

This chart begins late in 2012 when a share of AAPL was going for about $700.  This chart ends at present day. 

This is a Weekly chart of AAPL

Click for a larger chart of AAPL



• I find that many of us forget to look at the big picture.  Instead we get caught up in the smaller one and miss out on some details.  This chart of AAPL shows me some pretty handy info yet it is clean, simple to read, and lends itself to interpretation. 

What's on the chart? 

 

• Let's start with the long red downtrend lines (DT).  They show the decline from $700 to $400.  All three of them were drawn during the downtrend.  One of them follows the initial downtrend from $700.  The middle one starts at $700 and touches the top of an uptrend late in the downtrend.  The last one is similar to the middle one as it too starts at $700 and touches after an uptrend occurs.  Why draw these lines?  I was looking for the bottom...

• The smaller red DT lines are places you could have gotten into AAPL after the run back up began.  Do you ever hear people saying it's too late to get in?  They might be right.  But when you can draw a short downtrend line and the price breaks above, it is probably safe to try going long.  Don't worry that you didn't catch the uptrend at the Double Bottom.  Most people didn't.  It's ok to begin an investment after the beginning of a trend.  Just plan your exit so you limit your losses if the investment doesn't work out.  There is more detail about places to get into AAPL later in this post.

• The green line labeled "Double Bottom??" is exactly what it seems.  I was asking myself if this could be a double bottom.  If it was I knew there was a chance it was a sign that AAPL had seen the lows and it would be a good time to go long the stock.  Looking back it was a great time to go long.  That was about $150 per share ago...

• The green uptrend line labeled UT 1 shows the trend that AAPL has been following since that double bottom.  UT 2 is an accelerated trend that the price has been following since September 20, 1013.  As long as UT 1 holds, I will be long AAPL...

• The horizontal dashed lines are Fibonacci Retracement lines.  You don't have to have a Math degree to understand how to use them and what they mean.  But if you are in the Math degree club you probably know a little more about Mr. Fibonacci than you care to :-)  Anyway, I find it very interesting that AAPL came back to the 50% retracement line before turning up again.  It is common for downtrends to become uptrends around retracement lines.  The big question is always which one.

• My simple interpretation of the weekly chart is that AAPL is in a strong uptrend.  There is even an accelerated uptrend in place.  If you want to go long (or add to your long) you should try to do it after a bounce off an uptrend line or when a downtrend line breaks.

I showed you the Weekly chart of AAPL so I can show you the Daily chart. 

This chart starts at the end of the double bottom and ends at present day. 

 

 

This is a Daily chart of AAPL

• The daily chart is a little more erratic than the weekly but that is expected.  One thing to focus on though is that the Weekly and the Daily charts both show uptrends.  That is a pretty good indication that you are safe being long the stock. 

• There are many places you could have gotten into this stock after the double bottom.  The shaded green circles show you some of them.  All those shaded green circles show a downtrend line being broken.  And if you notice, they all lead to higher prices.  If UT 1 & UT 2 continue, there will be many more opportunities just like these. 

• Notice that I have drawn a red downtrend line beginning at the high on Thursday.  I drew it all the way down to UT 1 because it could take that long for the price to break the DT line if it is going to.  Based on what is happening with AAPL at the moment, I don't expect the price to even get to UT 2 before it breaks the red DT line.  But that is my expectation and it may have absolutely nothing to do with reality. 

• So how do I play this from here.  Well, first you should know that I took some profits on Friday.  The stock was following a VERY steep trend higher for 7 days.  Friday's price action fell below that steep trend so I took some profits.  The next place I will take profits is $545ish.  You can draw an UT line starting on 11/21 and touching the bottom of the next three candles.  It will be at $545ish on Monday and $547ish on Tuesday.  On Wednesday it will be at $550ish AND it will intersect the red DT line.  If apple breaks the DT line and stays above the UT line starting on 11/21, then we have a new and more accelerated UT line that has been formed.  These developments would be very positive for long investors.  If none of this happens then look for a bounce off of UT 2 or UT 1.  If it goes below UT 1 then then look for lower prices.  By the way, UT 1 is about $55 below the current share price.  That is about a 10% drop.  Do you really want to just jump in blindly and "hope" that the price doesn't go down 10% or more?  I sure hope not.

Base your investment decisions on the chart.  Trade (invest) what you see.  Not what you think, or feel, or hope, or ...    

Limit Risk & Protect Your Profits

 

Apple Inc (AAPL)

 

 

 

• First let me say welcome to the new Blog.  This has been a long time coming.

 

• This first post is more of a test to see how things go with the blog but I figured I would also give you an idea of what you will find here.  And Apple is as fine a chart to start off with as any.

 

• As you may know, AAPL reached a high of about $700 and then began a $300 decline to ultimately reach about $400.  Everyone seems to have an "opinion" about this stock but you probably won't catch me giving one.  My goal hear is to share the things I see in the chart.  Primarily the trends and retracements.  I typically make comments about the chart but I try not to give opinions.  After all, I invest based on what I see happening.  Not what I think or hope will happen.

 

This is a Daily Chart of AAPL