Using past price patterns of GOOG to predict the future of AAPL, November 19th 2012 (English Language)

Why Apple has the potential to be the next Google (just technically, not fundamentally speaking)?

Can past price patterns be used to predict the future? The answer is a decisive “yes”. The reason is that the psychology of traders does not change, and such psychology is captured by the trading rules adopted by Program Trading and used in my method. In this article I will apply the trading method to Apple (ticker: AAPL) and Google (ticker: GOOG) two high volume and highly participated stocks traded on the Nasdaq. In the companion video where I compare Apple price action to Google past price action, I show that when in 2008 Google failed its sequence of measured moves higher, it was not able to print new highs, but it kept moving lower and the next short setup was clearly predictable and it played out as anticipated. Nowadays in 2012 Apple is in a similar situation: the stock is broken and expecting it to print new highs is a mistake (at least at the current stage). That is not going to happen (unless the S&P500 makes a decisive move above some key level, more below), for the same reasons that traders’ psychology is not going to change this time.

Hereunder there is a trading plan for Apple (AAPL) going forward, based on the condiderations I made in the video where I apply my trading method to the price of Google and Apple stocks (picture below).

Picture: “A trading plan for Apple (AAPL) going forward“.

Any rally we will witness in Apple could not last long. The sequence of measured moves higher was broken this week on Thursday, October the 15th, 2o12. If the stock has put the lows on Friday we should see a rally into the 605 short area. Price should then continue lower into the 457 target area. This price prediction is possible not because of some sort of magic of because there is an ‘order in the universe’, but because Program Trading active on the stock is going to trade the stock on the daily and weekly timeframes using the same rules I have showed in the video. Should AAPL price break above the 629.5 area, that would mean that the S&P500 index would also breaks above the 1419 important level. I will review this stock setup in the coming weeks.

Please find the related video analysis here below:

The above article appeared in my latest newsletter. If you want to have  access to trading plans like this one, watch weekly video reviews as I record them, or get information on setups for the Euro-Dollar cross, the S&P500 index and some high volume  stocks (before they happen), please subscribe my newsletter. It’s free and you get additional content, market commentaries, setups, e-books, articles on HFT and program trading (from which I derive my trading edge), learning material and video-analysis that I don’t make available on my blog. You also get a mid-week update like the one I published on November the 7th.

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If you intend using this information for your trading please do your own diligence, find the advice of a trading professional and trade at your own responsibility. The information provided is for educational purpose only. Please read the Disclaimer and accept all the risks. Thank you.

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Filed under Articles, English language, Stocks

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