Chart of AAPL

Apple Inc (AAPL)
** While I was writing this post the AAPL / CHL deal was announced**

• There are many examples of stocks that have peaked, dropped into a valley, and then come back to the old peak and even surpassed it.  Could AAPL be another one of those companies?  It just might be.  Especially with the looming CHL news.  But don't count your apples before they are ripe.  The deal between AAPL & CHL isn't official until it's "officially" announced.

• On this weekly chart of Apple you can see that the old peak was about $700 and now we are at about $550.  You can also see that the high weekly price over the last three weeks has gone lower & lower.  The red downtrend line is your guide if you want to go long.  Once the price crosses above this downtrend line it should be safe to buy again.  If the price breaks the green UT 2 line, then going short would be a consideration.  But let me just say that going short with CHL on the horizon is NOT SMART...

This is a Weekly chart of AAPL

Click here for a larger view of the Weekly chart of AAPL

• The daily chart is more encouraging to me than the weekly.  Why? Because I can see that since the double bottom, AAPL is following UT1.  And since September AAPL has been following UT2, an even steeper uptrend line.  As I have said before, the red downtrend lines represent opportunities to strategically get into AAPL.  If you look at the most recent red downtrend line you will notice that it is fast approaching the green uptrend line I call UT2.  If the price breaks UT2, then look for it to bounce around UT1.  If it breaks the red DT line, look for higher prices.  If the break of the DT line happens in conjunction with a CHL announcement, the price may go much higher.  I would say that the most recent high of $575ish could easily be in the cards in short order (oops!  That was an opinion).  Let's just say that once the red DT line is broken, the $575ish level is the next anticipated level if AAPL is going to continue along the uptrend.
• What are my expectations?  Well considering all the "leaks" of a deal and some great investigative work by the investment community, I would say that a deal is coming.  When?  Soon.  But no one can give a date except AAPL and CHL.  I am long AAPL in anticipation.  This deal could be huge for both companies...  

• If you want to get in, you just have to look for more red downtrend lines along the way.  It is also pretty safe to add to positions once the price surpasses a previous high (peak).  If you really study the chart below you may see places where you can take some profits and wait for a better time to redeploy.  If you have trouble seeing what I am talking about then drop me an email at LinearInvesting@gmail.com.  I am happy to respond (time permitting).  

This is a Daily chart of AAPL

Click here for a larger view of the Daily chart of AAPL

Good luck in your trading / investing.  Trade what you see.  Not what you hope for.  Protect your profits.

Charts of KKD, PANW, & TWTR

• The first chart I want to show you is TWTR.  I wrote a blog post about this stock recently and you can find that post here :  http://trendlineinvestor.blogspot.com/2013/11/twitter-inc-twtr.html. 

Now that more time has gone by lets revisit the Daily chart of TWTR

• Changes to the chart : I moved the "H. Support" line down just a bit.  I added another horizontal line between the "Day 1 Low" and "Day 1 High" lines.  I also added the green uptrend line (UT) and the shaded box.

 

• How does all this change the outlook on TWTR?  The price broke above the downtrend line (DT) and continued higher. until Friday.  If you bought the break of the DT line you are doing fine.  Just realize that your UT line is about $3 below so protect your profits.  A drop to the UT line, from Friday's close, would be a 6% drop. 

 

• What does the shaded box represent?  I say it represents the next higher price range for TWTR.  If the UT line holds then the price will enter the shaded box.  Once it does that it should make it to the top of the box.  At least that is my near term target.  If the price drops below the UT line then it will probably test the "H. Support" line.  If it goes through there we have no history to guide us so be careful.  The UT line should be used to set stops and protect profits.  If it gets below there you should be out of your long so it doesn't matter how low it goes.

 

 

• The next chart I want to show you is PANW.  This stock has been around since late 2012.  It had a nice increase in price for about the first month.  Then something happened and it started going down.  I wrote a blog post about this stock too.  You can find that post here : http://trendlineinvestor.blogspot.com/2013/12/helping-fellow-investor.html

 

 

 

Now that more time has gone by lets revisit the Daily chart of PANW

•  You never know how long trends will last.  But the closer to the beginning you are able to get in, the longer you will get to ride it. The longer you are able to ride it the more money you will likely make.  So here is a long downtrend line that just broke.  Time to get in?  You could say that. 

 

• Lets talk about the green uptrend line (UT) that has formed recently.  It is your guide on the way up.  If you can make a little money and you have some room you may have to use some finesse on that line.  Feel free to adjust a trend line (finesse) if you are making money.  But don't alter your trading or investing plan. 

 

• If I was going to get into PANW right here I would set a stop for half my investment at 50.  I would set a stop for the other half at 48.  Another option would be to set a stop for a third at 50, a third at 48, and the remaining third at the DT line.  Today that DT line is about 46.  Your plan must be decided by how much risk you are willing to take. 

 

• Why $50 and $48?  Since the gap up on 11/26 and excluding Friday's candle, the tops of most of the candles is about 50 and the bottoms of most of the candles is about 48.  Use a cross hair pointer on a daily chart and you too will see it.  Or just use a ruler, held horizontally, against your monitor.  You can be a cave man if you want to...

 

• I have to say I like the developments over the last week.  If things continue on this course, I expect the price to make its way into the shaded rectangle.  Notice it's the day 1 range.  The day one range is key for an IPO.  Let's see what happens from here.

 

 

 

 

 

The last chart I want to show you is KKD.  I am only showing you the last 6 months of activity.  This stock is tough to understand.  It does great between earnings but horrible upon the actual announcement.  Why???  I have no idea.  All I know is that there is a lot of money to be made if KKD responds to this earnings report as it did the last one. 

 

Let's take a look at the Daily chart of KKD.

•  Let's look at the last earnings report reaction.  There was no indication, on the chart, that things were going to go badly after earnings.  But if you were long this stock you had a rough week after earnings.  Notice that UT 3 begins on the 5th day after earnings.  From then on you saw higher lows.  The first two down days after earning gave goals of price levels to achieve.  Notice that once the price broke above the lowest horizontal green resistance line, it broke above the next one the following day.  From then on it was a new uptrend line to follow.  Let's jump to this most recent earning release, look at that red candle below the uptrend line just before earnings.  That was a sign!  You had been following a trend line. Maybe you even adjusted your trend line (finesse).  But that red candle, closing below the uptrend line, was your chance to exit stage left.  Trend lines work if you respect them.  Adjusting them can be VERY dangerous to your investing account balance.

 

• Will KKD do the same thing this time?  I couldn't tell you.  Why did it react that way last time?  I couldn't tell you.  All I know it that there is a good opportunity to play KKD with very low risk and a pretty clear history.  Now, will the past predict the future?

 

• KKD closed Friday at about $20.  The horizontal green line in the most recent shaded rectangle is the "low so far" after this earnings report.  The nice thing is that the low and the close are very close to each other.  This means not a lot of risk before finding out if your thesis is wrong.  This is called a "low risk trade". 

 

• Let's say you go long here at $20.  If that was a bad decision you only have $0.40 of downside before the chart tells you so.  The price needs to stay above $19.57 if it's going to go sideways or go higher. That's only a 2% risk.   You could limit your risk even more by realizing that Wednesday's candle was inside Tuesday's candle.  Thursday's candle was inside Wednesday's candle.  And Friday's candle was inside Thursday's candle.  This is cool but it has to change at some point.  The theory is that if an inside day is broken to the upside then price should go higher.  If broken to the downside then price should go lower. 

 

• So how do you begin an investment or trade in KKD?  You could go long when the price closes above the last inside day's high or go short when the price closes below the last inside day's low.  If you go long, your stop could be $19.50ish.  If you go short your stop could be $20.50ish.  That's the top of the 2nd & 3rd days candles.  Once it closes above there it will probably go higher.

 

• I will be watching this stock pretty closely.  As I said on the chart, "I love Krispy Kreme Donuts."  And although I would love for them to succeed, I am not going to invest or trade with only my taste buds.  Trend lines make much better guides when it comes to investing.

Helping A Fellow Investor

First & foremost I appreciate simplicity.  I appreciate cleanliness.  I appreciate methods that work on a regular basis.  I understand that no method is pristine and most methods require some finesse.  The chart below shows an example of that finesse. 

Back in late 2010, ITUB began the downtrend that has lasted for 3 years now.  If you are investing in this stock you have to realize that the highs and lows are getting lower as time goes by.  The easy way to play this stock it to go short.  If you are going long, you are trying to make money the hard way.  Not that it can't be done but it will take longer and it will work less often. 

Look at how quickly this stock drops.  Look at the drops in July of 2011, April of 2012, and June of 2013.   Also look at the long red downtrend lines.  It makes sense that if a stock is in a downtrend, it will fall faster than it will rise. 

This is a Weekly chart of ITUB 

ITUB hit a high above the lower red downtrend line.  So I drew another downtrend line that starts back in November of 2010 and hits this new top.  This is the finesse I spoke of earlier.  But let's face it.  The 3 year old pattern continues as expected.  I drew a green uptrend line to show the last uptrend and where the price crosses below it.  I also drew a new red downtrend line.  The length of the line is arbitrary.  I have no idea how long the downtrend will last.  The angle of the line seems to be accurate though.  Time will tell.  I may need a bit more finesse along the way. 

I will say that I notice something I didn't put on the chart.  It has to do with the lows from mid 2012 and mid 2013.  Do you notice that these lows are close to the same level?  This may be a sign that $11.50ish is a level of support.

Now let's look at BBD.  Almost everything I said about ITUB holds for this chart too.  What are the differences?  Well I haven't needed any finesse yet.  And I am not willing to say that I see a level of support yet.  Here is a coincidence I just noticed.  It looks like the downtrend in both of these stocks started at almost the same time. 

This is a Weekly chart of BBD

I prepared one more chart to try to help you out.  That chart is of PANW.   This is a newer issue and therefor we have less history to go by.  That typically means there is a lot more finesse required. 

I noted the Day 1 high & low on the chart.  These are "mentally" important levels for an IPO.  You have to respect them.  I also drew a red downtrend line that started in September 2012.  The only other line on the chart is a green uptrend line that is much more of a horizontal support line in my mind.  I think this green line may show a double bottom that could lead to a change in trend. 

Friday's candle pierced the red downtrend line with greater than average volume.  It also closed above the red downtrend line.  If you want to go long this stock you may have good reason to do so.  Keep watching and let the story unfold. 

This is a Daily chart of PANW

Sorry this chart is so small but I can't get Blogger to let me change it's size.

You can click on it for a larger pic.

If there is any way I can help my fellow investor I am ready (as long as time permits).  I don't claim to be anything more than an investor who uses trend lines.  I am not the best investor out there.  I am not the most knowledgeable investor out there.  But I am someone who isn't afraid to spend some time helping out a total stranger.  I hope this post helps you. 

Buffalo Wild Wings (BWLD)

Buffalo Wild Wings has been cruisin' lately.  If you are looking for a good time to jump in, one may be coming up in the very near future. 

 

This is a Daily chart of BWLD

About a month ago, when BWLD announced earnings, would have been a good time to buy some shares.  It has gone from about $137 (after earnings) to $150ish where it is now.  In the process of getting up to 150ish it has created a well defined triangle.  The top of the triangle and the hypotenuse of the triangle are your guides for a new investment should you want to make one.

If you invest (long) here, don't let the price drop below the hypotenuse of the triangle.  If it drops below intraday then you can decide if you want to see where it closes.  If it closes below then going long may not have been the best decision.  Set your stop just below the green uptrend line.  I would say 145 to 148 is a good place to put your stop.  The uptrend line is currently at 148ish.  Remember that setting a stop is like you saying, "I am willing to throw $X.00 out the window if this doesn't work."  Investing is risky.  But you have to limit that risk so it's tolerable.

Once the price closes above the top of the triangle, you want to look for confirmation.  You want the next day or two to stay above the top of the triangle.  A close back below won't be a great sign if you are long. 

Monitor & adjust your stop.  The plan here is that the price will go above the top of the triangle and continue higher once that happens.  If you put your initial stop in at $146.50 to protect your initial investment just in case the plan didn't work out, then move it up to say 150ish or "your break even" once the plan comes to fruition.  Then move your stop even higher once the price has extended.

Protect your profits.  If this plan goes off the way I hope it will you could see a price increase of 3-10% in a relatively short time.  If you find your investment is up 3-5% in a month you should take some profits.  How?  Sell some shares.  Maybe sell 20% of your initial investment and let the other 80% run for a while.  As long as it follows the uptrend line just sit tight and watch it grow.  Eventually you will want to take even more profits. 

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.