Apple (APPL): Rounded Top :Trend-Over-Extension

 There has been all kind of talk on AAPL failing to make new highs after their block-buster earnings announcement last week.  To put it simply this is a bearish picture for the tech-glamour stock.

• Rounded Top formation pretty evident.
• Heavy selling volume last week, weak buying volume.
• If $600 breaks you can expect a retracement to $560-$550
• Earnings were amazing....why didn't arbituer's correct the price back to last weeks highs? Sentiment is bearish long term, that's why...bearish picture for economy = demand for apple goods will be much lower.

• To much Over-Head Supply on market = Strong Over-Head Resistance.
• If we cannot get past $625 on strong volume, then a fall below 600 is 100%.
• If moving past resistance fails, then we can expect testing of $560 level due to support failure.

Overall Apple has had an amazing run, but it seems to be to risky to not take profits on this mad winner, since it appears a Rounded Top formation is the case. I expect if we break 600, AAPL falls to 570...then if no rebound the downtrend will continue.

 

Gold Star Resources (GSS) : Descending Wedge - Multiple Bottom

Pattern & Technical Analysis

      Loving this chart, GSS trading at 52-week low, due to bearish outlook for mining stocks etc, GLD + XLB are not the hottest trading ETF's but GSS is significantly under-valued. Lets have a look.

We can above the multiple bottoms and the Descending Wedge Pattern : Bullish Reversal Pattern

We have established strong support at the $1.50 mark, this leads be to believe that supply is being meet by demand here...and this 1.50 mark as stopped over-extensions in supply in the past 4 months, hence the phrase "strong" support. It just appears bears cannot push GSS past this level.

• If $1.60 is pierced then $1.80 is the next level.
• If $1.80 is pierced and we get over the $2 mark, then we are looking at a legitimate possible long term trend reversal, Wedges are know for this kind of reversal action.

    We have strong support established, as well as an observable rounding bottom formation at the last touch of this wedge. The wedge channel lines are contracting nicely as they are suppose to, so i believe the bounce off of this 1.50 mark, will be the bounce that pierces the wedge.

Momentum Analysis

Momentum indicators across the board scream over-sold, a we have some specialized momentum indicators with buy signals which i will show below.

5 Day EMA crossed %R in at Over-sold level: Bullish

5 Day EMA crossed True Strength Index at Over-sold level: Bullish



Stochastic & Momentum indicator cross over, plus turning upwards nicely in the Over-sold region of the chart.

   Momentum analysis suggests GSS is definitely over-sold and due for a nice run here shortly. I agree, all the indicators are very over-sold and are turning upwards to climb out of the rut GSS has been in. This is all very bullish for GSS, we can see indicators across the board suggest its time to buy and ride a new wave of positive price action.

 We also got a MACD cross-over taking place as well as a MACD Divergence signal: Super Bullish especially for long term price action.

Volume Analysis

Volume indicators show a decrease in volume over the past two weeks. This is typical in the Descending Wedge Pattern. OBV plus A/D suggest steady accumulation at these price levels with alot more to come.

Entry Strategy

 Based on some of the analysis methods of my system, this is a high probability trade. I think tomorrow we will open either at 1.55 or a penny or two below or a above, depending on the markets overall open, which should be up. I would start by buying a couple 5k block shares with a tight limit. Just test the waters to see if the bottom is legit. We saw a nice hammer candle form today, which is a bullish reversal candlestick.

   
Overall GSS looks like a great bottom trend reversal play, and since its ADX rating is 17 is definitely in a oscillating zone and indicators should be used to judge if it is over-sold....**which it certainly is**......i going to initiate a 70,000 share position, around 1.60 tops.

Position: Long

Target: $2.45