APPLE: Volume Profile Analysis 📊

2020年10月29日

In my previous article, I was talking about stock trading with Volume Profile. The analysis I did in that article was on the sportswear company Nike.

In this article, I will continue on what I showed you the last time and do another analysis, this time on Apple.

A couple of days ago Apple revealed their new iPhone 12. I admit I quite like it – especially the new camera. But do I buy their stock just because I like their new iPhone? Absolutely no.

I buy an iPhone because I want to make calls, text, use a camera, use some apps, etc … that’s it.
I buy Apple stock because I want to make money on it.
Those are two different things and you should approach them differently.

You first look at the chart, the numbers, and only then maybe on their new shiny product (which does not really have the potential to move the price of Apple stocks too much).

Let’s now have a look at the chart!

APPLE: Volume Profile chart analysis
As I told you in my previous article, I use mostly Daily time frame to analyze stocks.

There was a strong uptrend on Apple (AAPL). When I see an uptrend like this I use my Flexible Volume Profile to look into that uptrend to see how volumes were distributed there.

Mostly, I look for significant Volume Clusters (heavy volume areas that stand out).

Resistance 125.00 (already tested)
The highest Volume Cluster was around 125.00. As you can see the price nicely reacted to it – it worked as a Resistance. The current selling activity is a reaction to it.

The Volume Profile setup to identify this short trade opportunity is called the “Rejection Setup“. You can read more about it for example in my Volume Profile book which you can download here on my website for free.

So, the 125.00 short level is already spent. There was a nice and precise reaction to it.

Support 110.00 (already tested)
Another significant Volume Cluster (the one in the middle) was around 110.00. The price has already reacted to it and went upwards from there. The setup behind this long level is called the “Trend Setup“.

*BTW. the best place to quit the Long trade based on the 110.00 Support was at 125.00. Why? Because 125.00 was a volume-based Resistance.

Support 97.00
This leaves us with the last Volume Cluster – with its volume peak around 97.00. This one is the most significant one, in my opinion.

The reason is that there were massive volumes traded, and that really strong uptrend started from there. Also, as you can see there was a gap which I think will get filled and then the price will shoot upwards.

However, the gap is not the main reason why I think the price will go upwards from there. It is the heavy volume area (Volume Cluster). It indicates that heavy institutional volumes were traded there – big guys were adding to their Long positions.

When they were done with that, they started to push the price aggressively upwards.

The zone, where they placed most of their Long positions is important for them. If the price comes back to it again, then it is likely that they will become active and they will start defending this area (by aggressive buying).

This is the main reason why I think this zone around 97.00 will work as a strong support.

I hope you guys liked this article. Let me know what you think about the new iPhone as well as on the article in the comments below!

Happy trading!

-Dale