“Apple stock has fallen over 77 points since the December high. True believers look at this pullback as a small bump in the rally road, while company detractors believe that recent cracks in the growth story could escalate into a full-scale collapse we head through 2008,” Allan Farley writes for TheStreet.com.
“As a technician and trader, I have little insight about iPod, iPhone or Mac sales going forward,” Farley writes.
MacDailyNews Take: That’s for sure, at least.
Farley continues, “But I can read the charts and see how they’re shaping up after the recent plunge. Is now the right time to reload positions for a trip back to the highs? Or should current investors jump ship while they’ve still have the opportunity to salvage a few profits?”
MacDailyNews Take: Did he say “charts” or “stars?” The latter would have about as much credibility as the former when it comes to forecasting a mould-breaking company like Apple.
“What conclusion can we reach looking at the long-term Apple chart? Well, it isn’t good news for the bulls. The rally off the 2006 low was parabolic in nature. As a rule, parabolas end poorly, as we’ve discovered with the housing market in the last two years. So it’s likely the long uptrend has finally ended. In its place, I’m looking for lower prices, or a sideways period lasting for up to two years,” Farley writes.
“Can long-term, deep-in-the-money Apple longs use this technical viewpoint to their advantage in the months ahead? Of course — there are many things they can do to protect profits and reconsider their goals, given the broadly negative outlook for 2008,” Farley writes.
MacDailyNews Take: “Broadly negative outlook” from a guy who’s gazing at
his navel a chart with no other information. Ridiculous.
“First, they can lighten up after the stock bottoms out and retraces a good part of the recent downtrend. Second, they can buy long-term equity anticipation securities (LEAPS) or use shorter-term options to dampen volatility and lock in profits. Finally, and perhaps most important, they can just end their love affair and look for the next tech juggernaut, which is waiting patiently for their discovery,” Farley writes.
Full article here.
Yeah, but what do the entrails say? Forecasting stock performance based on charts alone is folly, especially with a company like Apple. Oh, wait, there are no companies like Apple.
Apple’s latest quarter set records for revenue ($9.6 billion) and net quarterly profit ($1.58 billion). Apple blew away expectations with record Mac shipments (2.319 million), and also achieved record iPhone sales (2.315 million) along with record iPod sales (22.121 million). The Street punished Apple because they fear a recession and because Apple didn’t promise them what they wanted for the upcoming quarter. Apple merely promised Q2 08 revenue of “about $6.8 billion,” which would be 29.3% over Apple’s Q2 07 posted revenue of $5.26 billion. In other words, the ever-conservative Apple expects their business to grow 29.3% year-over-year in Q2 08.
With iTunes Movie rentals, the new Apple TV “Take 2” software update coming, larger capacity iPhone and iPod touch devices, booming Mac sales, the iPhone/iPod touch SDK looming, 3G iPhone, the world’s best OS, and more – Apple continues to fire on all cylinders.
You can’t see all that if all you’re doing is staring at a chart.