My trade of the week is an Apple short play. However, I do not think this is a weekly play. I think this move will play out over the next few weeks. But the chart setup right.
Apple is one of the largest companies that make up NASDAQ, so this is by no means a trade that will “go to zero”. But with the current market concerns, I think Apple could see a nice pullback, creating a good short opportunity. So, why not capitalise on a pullback before looking for a long entry later on?
When the market finally finds a bottom, there will be plenty of opportunities for long-sided trades. But Apple recently broke below an important trend-line. The price also retested this trend-line last week but failed to reclaim it. This is why I think the price may continue to head down towards $122 over the coming weeks.
$122 is my first target, however, continued market fear could lead to the price testing $103 (or $100). This trade will be based off market sentiment as I don’t think there will be any specific bad news to aid the price lower. My stop loss would be $151. This provides $3.50 of risk for $25 of reward on the first target.
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