Once in a while I see something that I can’t resist writing about because it is something that historically has worked so well in the past. A couple of weeks ago, I told you about $FB and clearing out those that bought the first day, it has yet to happen, but it will, the market has not helped.
As I have told you here, my favorite technical indicator is the Trix, a slow moving average, which avoids quick moves by smoothing out price movements. You can use the Trix on a daily and weekly basis and sometimes, not too often I look at the monthly Trix. But in general, I love the weekly Trix. If a stock is not in a strong up move of the Trix, I don’t trust what the daily Trix is telling me.
Right now, if you look at $AAPL, my favorite stock, the daily Trix is looking very nice, still on an uptrend, as you can see below in the graph, the Trix being the red line. I have placed arrows whenever the Trix has made a low and turned around, just to show how good it has been in the recent past.
As you can see the Trix gave a good signal in late April, $AAPL moved about sixty dollars before it went down. Then again in late June, the Trix said buy and $AAPL is still moving. But to see if you can stay or you should sell in the dips in the daily Trix, I look at the weekly Trix for conformation. And here it is, the weekly Trix:
Asa you can see, the weekly Trix is still in an uptrend, which tells you that you can ignore the daily movements and stick with it for the time being. Note that there are six buy signals, as indicated by the arrows since 2010, all of which would have helped you make good money, as all worked quite well. In fact, the only fuzzy one was the last one.
But what I found intriguing is what happens when you look at the monthly Trix. This is shown below:
As you can see, since 2000, there have been only THREE monthly buy signals: One in 2000, when the stock went from about $7 to $13, another in 2008 when the stock went from about $89 to $190 and the current one that who knows how high it will take it.
But what is important is that this is a significant buy signal that appears to say that $AAPL has ways to run. Unless something happens in the world, it is unlikely that there will be a reversal and $AAPL should continue to run.
I promise to update when this signal reverses.