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My thoughts on how to take another bite out of our favorite stock.

In reviewing the IBD 50 yesterday for the criteria for CAN SLIM stocks I could not help but notice the incredible fundamentals for Apple. While I trade the charts and believe they tell the story better than anything I do believe these numbers explain the chart action after earnings.

Current Quarterly Earnings: It is hard to beat 116% Earnings per Share growth.

Annual Earnings Growth: Nine straight quarters of over +15% growth

New Products, New Highs: iPads are as new and as hot as a product gets. We are also sitting within striking distance of the $526.29 all time high.

Shares Outstanding: 923 Million Shares

Leader: Apple is #1 in the Computer-Hardware Peripheral Group in earnings and relative strength. The group ranks 61 out of 197

Institutional Sponsorship: Apple’s Accumulation/Distribution rating is B+ according to Investor’s Business Daily.

M arket Direction: The market is currently in a confirmed uptrend. It is safe to be long stocks.

Return on Equity of 42%

Last quarter sales up +73%

We are currently 17% above a $427.85 cup with handle buy point. However we have room to run.

Possible buy points are at the 5 day exponential moving average, the 10 day simple moving average, and the gift from the trading gods would be another chance at the 50 day simple moving average.

Sell your Apple position if the stock loses the 5 day ema for short term trading or the 10 day sma for a longer planned hold and does not retake the day’s close.

Do not risk more than 1% of your total account on your Apple trade.  Apple call options are a great place to play it to control risk and control stock, if you know how to use them.

No matter how great the fundamentals are and how much we believe we go higher from here we have to trade the chart not our predictions or belief. Whether we go to $600 from here or the 50 day moving average we have to be prepared to move with the chart not stubbornly defy it.

Marry your trading plan but only date your stocks, no matter how attractive they are.