The Path to Profits with AAPL

There are some chart patterns that offer higher probability setups. Learning to recognize them on stocks that have good fundamentals, evidence of accumulation by institutions, and seasonal track records of gains for the near future will consistently provide you with the best trade candidates.

One such chart pattern is the consolidation within a tight sideways trading range. If it is a quality stock to begin with, is likely interesting to institutions, and has a seasonal track record suggesting accumulation by institutions in previous years, then any breakout to the upside can be considered a good entry point for a high probability trade.

In the October 14th, 2013 issue of Seasonal Forecaster I pointed out a tight consolidation I had noticed in Apple (AAPL). A quality stock, although at the time there were a few articles questioning the upcoming earnings announcement.

AAPL had formed a tight 12-day consolidation. Volume on every day was below average. In the newsletter, I said “AAPL is ignoring the overall market. It bears watching, as any breakout from the current tight range may be the start of an extended move, and I suspect the direction will be upwards.”

This just comes from experience. I've watched AAPL for years, and know that any tight consolidation of the stock like this is rare, especially before earnings.

AAPL broke out of that consolidation on increasing volume and logged a 9.4% gain over the next 12 trading days. The earnings announcement produced only a temporary pullback.

AAPL then fell into another tight consolidation range lasting 4 weeks, and once again, it was a strong breakout on the upside on increasing volume. This produced an 8.7% gain in 7 trading days.

Become familiar with a small handful of stocks, picked from a diverse group of quality stocks with good fundamentals, chart patterns suggesting regular higher probability setups, and with track records of gains (or losses) at the same time each year. Get to know the companies and their stocks  inside out. Learn how they respond to earnings, how they respond to breakouts and reversals.

Pick two or three chart patterns to become familiar with and trade the patterns on these stocks over and over. This is a key technique used by consistently successful professional traders.

Of course, there's much more you need to know and many more stocks you can capitalize upon each and every day.  To find out more, type in www.markettamer.com/seasonal-forecaster

By Gregg Harris, MarketTamer Chief Technical Strategist

Copyright (C) 2013 Stock & Options Training LLC

Unless indicated otherwise, at the time of this writing, the author has no positions in any of the above-mentioned securities.

Gregg Harris is the Chief Technical Strategist at MarketTamer.com with extensive experience in the financial sector.

Gregg started out as an Engineer and brings a rigorous thinking to his financial research. Gregg's passion for finance resulted in the creation of a real-time quote system and his work has been featured nationally in publications, such as the Investment Guide magazine.

As an avid researcher, Gregg concentrates on leveraging what institutional and big money players are doing to move the market and create seasonal trend patterns. Using custom research tools, Gregg identifies stocks that are optimal for stock and options traders to exploit these trends and find the tailwinds that can propel stocks to levels that are hidden to the average trader.

 

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