Monday, 15 October 2012

Quick Technical Charts - Apple (AAPL)

Normally I don't like to do technical charts on Apple for a number of reasons.  One, its such a heavily traded stock and a heavy hedge fund / institutional favorite that I don't have a good feel for how well the technicals work for it.  Another, its can be very news driven sometimes such as the rumors of the upcoming iPad mini scheduled for next week.  Lastly, it almost always just goes up since they're making so much money that there's nothing interesting in the charts.

But today, I'll look at it anyway because the charts are actually interesting.  So lets take a quick 6 month look.  Apple had been climbing since it hit a bottom in late May at $520 but that's still an astounding jump from the beginning of the year when it was at $420.  Yes that's right, Apple is up an astounding 55.5% this year so far.

While Sept. 4 was the announcement about the Press Conference for iPhone 5, it really was inconsequential as everyone knew by then.  Based on the charts, its very hard to sell when the market started pricing in any expectations as its been a continually increase over time.  However, when the iPhone 5 released, that actually marked its high point and the stock is down 10% since then.  As you can see, its current price is at the very bottom of the trading channel that started in late May.  That trading channel has also been mostly confirmed because the recent highs also hit the upper bound before dropping.

Normally, this would say that Aapl is poised to reverse back up.  With the upcoming iPad mini announcement expected next week, there's definitely a strong catalyst for an Apple jump.  However, as I mentioned above, Apple stock tends to be hard to predict technically in my experience and its hard for me to grasp such a huge upside potential in a stock that's up 55% already YTD (where are you reversion to the mean???).  However, I've had that thought for years already about Apple so I can't really say much about that hesitation!  So if you're a long term believer in Apple (seems like that's everyone nowadays) then this represents a very opportune moment to jump in (even if you are a bit late already).   

See the jump for Apple's one year chart and prepare to hate yourself if you didn't buy early!

Disclosure: I have a teeny tiny long equity position on Apple from 2011ish that I wonder everyday why I didn't dump all my money in and also kick myself everyday for selling the shares I bought at $69 (yes Apple wasn't always triple digits) in 2005 too early.  

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