Today I'd like to say a word or two about Apple. With a market capitalization of over 460 billion dollars Apple is the biggest stock on the planet right now. It represents a huge portion of both S&P ans Nasdaq index and it is on the eye of every portfolio manager in the world. What I'm trying to say is that as long as Apple is going up, stock market will go up. When Apple tops, market will top together with it.
Now, has Apple already topped indeed? Many traders on their blogs and Twitter are fairly convinced that yesterday's reversal was a climax top. It may be, but I think chances are better that we will see at least one more leg up after brief consolidation. Besides AAPL chart I have two charts to show you to backup my words. First is Google that climax topped in 2007. GOOG made a very similar pattern to AAPL's. A breakout was followed by a straight line up. After couple of days of consolidating price exploded higher once again, before breaking down for good.
The second chart is last year's top in silver as many of us still remember very well. Silver developed a two-stage top. The second stage also made a brief midpoint consolidation before another leg up and final collapse.
And now let's see how AAPL looks like today. A very similar situation indeed. I consider a gap up on earnings as breakout. And yesterday's big volume reversal candle as merely a start of midpoint consolidation that should not take more than just a few days to complete. After that AAPL may see 700 plus in a month or so.
I'm not saying this will happen exactly as drawn on the chart, but historical precedents suggest another leg up is very likely. I would not touch AAPL at this stage, though. Every big portfolio manager in the world owns at least a portion of this stock and will use any strength to unload his stakes at a profit. AAPL is strictly an institutional stock and cannot be traded. It also cannot top in one day, so let's see how it develops.
No comments:
Post a Comment