More on the Overbought Status of Apple

Last night I talked about the “rubber band” short setup for Apple. If the stock heads into the close with the same candle pattern that has emerged this morning, I would expect a pullback based on an early “evening star” candle formation.

My testing and experience tells me that this type of candle formation is an average predictors at best. However, when coupled with extreme overbought readings it gives a very strong edge.

Note that I am still bullish AAPL. It’s just overbought and due for a pullback. An orderly dip to support would make for a great long entry.