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Wednesday, January 10, 2007

Entry Points In AAPL

APPLE was the big winner last night, up more than 8% in a trading session and lending some support to Nasdaq. Hope you had fun last night tuning in to MacRumours.com providing live coverage of the event via text, audio and photos. The above pictures courtesy of MacRumours.

It is not easy to hitch a ride on such a momentum trading session with low risk entry. You'll most probably have to drill down into smaller time frame e.g 5 min chart like this one below. 2 low risk entry points were present last night.

First, was the NR7 of the 5 min chart. Entry on break of 7th bar high. Notice a triangle formation on lower volume, with lower high and higher low. This is a sign of consolidation before breakout. If you have missed the earlier entry point, another good entry point was a second triangle forming around 12.45 - 1.10 pm ET, consolidating around $88. Entry on break of 1.05 pm ET bar high.

Know the support and resistance of the stock and draw them onto the chart prior to entry. With this type of momo trading, you won't have the time or in the right frame of mind to plan once you are in the trade. It is best you take profits off the table along the way because with such an event on-going, its hard to tell when the market decides to profit take.


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