This morning we finally got an Approaching Oversold reading for Apple
(NASDAQ:AAPL) at $525. Now let me stress the fact that our countertrend has three levels: 1 - Approaching Oversold, 2 - Oversold, and 3 - Extremely Oversold. Year to date, I have only seen one stock at Extremely Oversold levels and that was Advanced Micro Devices
(NYSE:AMD). Can we get to an Oversold level? Yes, but we think this is now (at $525) a high probability trade off of this level. Short-term traders: Use a tight stop off the $518 level. Investors: Only start with ¼ positions and never allocate more than 5% of your total investment account to one position.
Below, we have added an example of one stock that hit an Approaching Oversold level -- Chipotle Mexican Grill
(NYSE:CMG) -- and about 4% lower than that, it hit an Oversold level. So please keep in mind that Apple is not Oversold; it is only Approaching Oversold. This can be used for investors looking to scale in at $518.
Click to enlarge
Chipotle Mexican Grill
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