Click chart to enlarge We recently voiced our opinion that AAPL was getting ahead of itself on a valuation basis. We now see deterioration in the strength of its technicals, too. It broke its trendchannel and 50dma. If this chart appeared at a time when the market was beginning to melt down, this would be a screaming sell. But considering the market remains bouyant and other techs (particularly GOOG) appear healthy, this is not a 5 alarm fire. Nonetheless, now is not a good time to back up the truck and load up on AAPL shares. This is one chart that will see $200 again sometime in 2010, so there's no rush to buy.
In our ideal world, the market itself would "blow off"... rally another few hundred points (maybe even to 11,000), then top out in a big way, possibly retracing to 8,500 or so before stabilizing. If this scenario plays out, then in hindsight AAPL would have been exemplifying investor's current true feeling about the market. And that is that we're at a point where stocks are getting overpriced. We've come too far too fast. But whether or not our feeling is the concensus remains to be seen.
3 comments:
Snot,
If the perfect world scenario plays out and the DOW reaches 11,000 your firm must have some ideas on what will be purchased after your 29% DDM position is sold. Care to share any of them with us? DXD? QID? Is SMN back on your radar these days?
Thanks
Snot's "firm"????????????
If we get a chance to sell near Dow 11k, we would buy some short index ETF's, and watch AIXG for an entry point. If the market sells off hard enough, we may just start scaling into that issue. Otherwise, there's nothing on the radar. Do you have any suggestions?
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