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Apple weekly swing high and RSI divergence signal given

October 1, 2012

01 October

Last week, I set out the entry criteria for a short position in Apple. These were fulfilled by Friday’s closing price.

Weekly chart

Aapl_weekly_011012

  • The weekly swing high was formed, the price closed at $667.10
  • The RSI has moved back below 70. I said to take that as the entry rather than a move below the intervening RSI low from May

Daily chart

Aapl_daily_011012

  • The price ended the week below the intervening low, following the RSI divergence
  • The absolutely ideal entry criteria would be a new high with the 14 day RSI staying below 70. That is still a possibility and a slight risk, given that we may get a short term bounce
  • I will record the short position entry price as $667.10 but if you have not yet taken this position, you may want to see whether there is a rally over the next few days (the futures are up) and then sell a failure of that

 

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