Stock Update: AAPL Where to Now? A Long Term View Part 3

Right. We now come to the daily chart and again we take note of where the support lines were in the medium term and then set line for where we want to watch for short term support which I have defined as $292. We observe that volume has dropped off dramatically in the last 4 trading sessions and the MACD has turned south. There was a shooting star at the $318 level (Mon Oct 18) followed by a plunge down the next day (Tue Oct 19) undoubtedly due to profit taking and since then indecision to the negative side with all the red candles.

To me this says to go short for a while until participants decide what direction they want to go in. This will mean that you need to keep your finger on the trigger ready to close your short position at any time to prevent losses from growing.

Disclaimers
1. This article is not intended to provide investment advice and is an expression of my own opinion. Readers act upon this information at their own risk.

Stock Update: AAPL Where to Now? A Long Term View Part 2

In my last post, we started to see that the long term view of AAPL looks bearish and raised the question whether we are due for a fall in AAPL.

With this weekly chart over a 2 year period, I have identified 3 support levels - $191 (long term support), $270 (medium term support #1) and $240 (medium term support #2). Since the end of August, AAPL has moved up nicely in price and in volume. This is a good sign that participants are there to support the price in increasing numbers.

You will however note that the candles are getting a little extended beyond the Bollinger Bands the last 2 weeks and we shall see whether this week ends up strong or weak to turn the MACD down where we may see some downward action, consolidation before resuming the uptrend, or sidewards action like we saw between April - September. Anything is possible.

Should we go short at this time? Take some profits off the table?

Disclaimers
1. This article is not intended to provide investment advice and is an expression of my own opinion. Readers act upon this information at their own risk.

Stock Update: AAPL Where to Now? A Long Term View Part 1

What an amazing ride it has been for Apple since my last entry the end of June where we were at around $260 and looking at a pull back which is what we saw happen ~$240 early July and even lower in August to ~$236 and not breaking out beyond $263 until September. During this time, iPads were being released around the world driving up earnings and giving positive momentum to the stock sending it above $300. What is next in store as we head into the end of the year with U.S. mid-term elections taking some of the focus and then onto the holiday season?



It may be a good time to take a breather and look at the bigger picture in terms of a monthly 5 year chart and look at what has been going on.

Firstly let's look at volumes since 2007. Interesting that the monthly volumes have been very light in 2009 and 2010 compared to prior years with the highest number traded in May 2010 of just under 675 million shares. Nevertheless, the stock has climbed higher. This is a comment often heard in the media and the concern here is that fewer investors are chasing the stock higher and is an issue around a lower diversification the investor base which may lead to an increase in risk for those participating as there are fewer opinions out there than there were before. However, it could be that we are getting a better quality of participants and fewer 'speculators' in the markets by way of hedge and/or quant funds which exited the markets due to the financial crisis. What we therefore are seeing in the lower volumes are more "normal" trading volumes which we say pre-2005.

Still on volume, what we are also seeing is a bearish divergence with volume falling while prices rise. Is it possible that AAPL is ready for a fall?

Disclaimers
1. This article is not intended to provide investment advice and is an expression of my own opinion. Readers act upon this information at their own risk.

Stock Update: AAPL

AAPL is about to pull back. The overall market is needing a breather and we are about to get it. AAPL has held on well and the two bearish engulfing patters is an indicator that the bears are getting stronger. The MACD is topping out and heading down. We'll get a dip here to under $260, possibly to $250 or $240. I would be buying at these levels.

Disclosure
I am LONG AAPL Puts.

Stock Update: AAPL. Is Apple Having Butterflies?

While reading an article on Butterfly patterns on forex today, I noticed the bearish butterfly pattern under discussion looked vaguely similar to how AAPL was looking especially after the run up over the past two weeks on positive news about iPad sales topping 2 million in the two months following its release and with the announcement of iPhone 4. All "ka-ching" type of news to me justifying a move up and with second quarter coming to a close, add in window dressing to your list of reasons for AAPL to trend higher. Who would not want to tell their investors that they are holding great company like AAPL?

This leads me to one of the primary reasons why I take this bearish pattern seriously, because more than likely after June 30 will we see some profit taking and a pull back in the price.

Looking at the chart with another pattern - Cup With Handle, we could argue that profit taking will lead to the formation of the Handle at which point it will attract buyers to come in again and pushing AAPL above $270 and break out.



With the pre-markets reacting positively to China's announcement on the revaluation of its currency, we are seeing AAPL push higher along with it. I was Long AAPL puts already and will be watching this trade for the pull back or for the bulls to continue at which point I will cut bait.

References
The Butterfly Pattern
Stock Charts - Cup With Handle

Disclaimers
1. This article is not intended to provide investment advice and is an expression of my own opinion. Readers act upon this information at their own risk.



Disclosure: Long AAPL Puts

Stock Update: AAPL

What is not to love about Apple Inc these days? $22million bonus for Tim Cook? Sure! Go ahead!

As we get closer to the launch of the iPad, the talking heads like Cramer have been pushing up the stock. After wavering in early March around $210, we saw a gap up on Fri Mar 5 to close at $218.95. A week later we are at $226.60. All that I can say is if you are long AAPL take profits. Don't worry if you have missed this move to get in as there will be more opportunities to come.

For now, go short or buy AAPL puts. Be ready as always to close out your positions if it goes against you.

Source:E*Trade

Commentary: Apple iPad and Why I am Still Keen

Ok, the word is out on the Apple iPad with mixed reviews so far. Many were expecting a bit more than what Apple delivered - USB port, SD card slot, and more computer-like capabilities - instead it was more like a bigger version of an iPhone/iTouch.

I can see where these folks are coming from, but Mr Jobs is not a stupid man. He knows that what the market wants is an instrument that gives you the ability to do more with what you ALREADY have.

If you have an iMac, Mac Pro, or MacBook, you already have a fantastic piece of equipment to do your work on. Then you have your iPhone to communicate and connect, play games, music, video and apps to fill in the rest of the gaps and which nicely syncs with what you have on your computer.

What is lacking is the ability to see all this stuff bigger. Do I want to spend another $1,000 bucks to do that which I have on my computer? Not really. Would it be useful to have a larger version of what I have on my iPhone to improve my productivity without dragging along my computer? I should say "Yes!".

If the Amazon Kindle has proven anything, it is the need for a device to bring along with me to read stuff on. Apple's iPad does that and more - photos, video, web surfing, email, calendar, etc. The Apps out there are also pretty sophisticated - I can read and write Excel and Word documents, play games, and much more. I don't need to replace my computer, I want to add to it. The iPad does exactly this. Are there improvements to be made? Sure. It will happen just as we have see the iPod and iPhone evolve, so too will the iPad.

It will sell. You watch.

Disclosure: Long AAPL

Commentary: Why Apple Is Going to Corner The Tablet Market

PC World wrote an article "HP Slates Lowers the Bar for Apple's Tablet PC" and they cannot be more correct in their assessment. Amazon with their Kindle has already kicked off consumer interest in a slim, easy to carry, fast start-up type of product focused on doing one thing - reading books or articles. They have succeeded where Sony has not with their Sony Digital Reader Book and taken out most of the competition in this space.

The actions of HP together with Microsoft is a "me-too" reaction to the rumors around Apple's iTablet/iSlate and goes to show how des perate they are to catch the scrapes of whatever falls from Apple's table even before the food is served.

Apple takes its time to release its products to make sure it is darn good and take off immediately. It is a kind of "shock and awe" type of strategy. And once it is out they work pretty hard to correct any problems that are fed back to them.

Apple's "instant-on" product is why I bought a Mac. Non-scientific testing has Snow Leopard OS X starting up twice as fast as Windows 7. If Microsoft's operating system for tablets don't speed up to be on par with what I expect Apple's to be then I say you'd better spend your money on an iTablet/iSlate despite the higher cost. You can earn more money, but you can't buy more time.

Then there is the Apple eco-system - Mac Books + iTablet/iSlate + iPhone/iTouch/iPod - all syncing together via iTunes, bluetooth, wi-fi, mobileMe. I expect to be able to move from one medium to the other seam lessly.

Quality, speed, and effortless integration from one product to another is going to help Apple maintain and expand their market in these niche areas. Will Microsoft products and supporting hardware be sold, of course, but it will be Apple who will be laughing all the way to the bank.


Disclosure: Long AAPL, Long MSFT