“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.
Basically the whole market is down. And that’s News?
Google was up to 700 and now it’s down to 500. ( I supposed he thinks Google is a done deal too)
Apple has some of the best products on the market. I don’t expect them to produce an iPhone with every new product release – it would be nice but let’s be realistic. Apple will produce as they invent. I’m not worried about it.
My Mac is better than ANY Windows PC and I’ll continue to buy Macs and iPods. The day Apple starts producing mediocre stuff and someone else can out do them – that’s the day I’ll consider them over.
Say what you will, but I half-seriously think that Apple’s current position is due to “punishment” by the institutional investors for Jobs and Apple’s placement of Randy Newman and his unfortunate choice of material (second-rate America?) at the last MacWorld Expo.
Does that strike a note with anyone else?
You won’t find any technical investment theories winning Nobel Prizes, unlike fundamental investment theories, which do.
“Oh, wait, there are no companies like Apple.”
Because Apple is a magical company which sells hopes and dreams rather than tangible products, and Wall Street only knows how to analyze companies based on how much money they are likely to make now and in the future. How unreasonable is that? To analyze a company based on the money it’s likely to make for investors. That’s just ridiculous. Don’t they know how much we all love our Macs. That is much more important than making money.
@oh no my shorts
I don’t know if Randy Newman had any impact on the the stock price, but I was annoyed by his patter. Why is that liberal entertainers feel a need to pontificate politically when they’ve been hired to play a few tunes. What I found so hypocritical was that between his railing at big corporations he didn’t see any irony in his fawning over those who sign his paychecks: Pixar, Disney, Apple…
Guess what Randy, those guys are BIG CORPORATIONS too! Get off your high horse and ‘shut up and sing’.
PS- I admire Randy’s talent and music very much. And he, like all free citizens of the world are entitled to their opinion. Just don’t take advantage of the microphone you are given to entertain to voice those opinions to those who came to hear you play and sing.
Because of general market conditions currently, it is possible that AAPL will trade sideways for a while. However, Apple actually makes huge revenue and profits. And recurring wireless revenue from iPhone is continuing to build, as Apple releases iPhone into new markets. So think the price has stabilized between $120 and $130 on the downside. As a long-term investor with a relatively small position (worth 10 times more now than when I bought), I don’t plan to sell. But I might buy some more.
One thing I noticed at Barnes and Noble a few days ago was that there is now at least an equal amount of shelf space devoted to Mac OS books as there are Windows books. Windows books used to have several times the shelf space as Mac.
What does that tell me? It says that lots of people are buying Mac books these days and that the Mac platform is really taking off.
That can only be a good sign for Apple stock.
Dong!!
Apple Store in Miami is insanely busy.
I call BULLSHEET on “TheStreet”
People are buying so fast that I had a hard time finding a free Apple person to buy a iPod.
The stock is down because instead of nearly everyone buying Apple toys, it’s just the well off which is Apple’s primary market to begin with.
To me, the stock market is no different from the gaming tables in Vegas. You simply cannot predict how stocks will move in the future.
With that premise, long term, Apple is certainly a great investment and that will prove itself in the LONG TERM. 3 months is not long term. Neither is 6 months or 1 year or 5 years.
If you want to make money on Apple stock, buy it and sit on it for years. And hope the hell nothing happens to Jobs.
Funny thing is that everyone is right. Stock’s best days are behind it. However good the fundamentals are,the fact remains it us a consumer goods company and will get pinched. Not every one has 500 bux for apple goodies. They haven’t missed a qtr in yrs… What happens when they do? So far the crowning achievement is the iPhone and I personally don’t need another device at all…..as most of you know its that good. So theory would say that with every iphone they sell they lose the repeat iPod biz that everyone was so accustomed to drive the stock higher. Computer biz is good but not enough to offset that. For now. Eventually the stock will get cheap but recessions have a knack for driving down visibilty and therefore stock prices. 110 or lower… sorry
Randy Newman writes a song . . . buy AAPL
Randy Newman takes a brief hiatus . . . sell AAPL
Got it. Does anyone here know the name of the thirteenth Zodiac sign?
As an AAPL investor, and longtime fanboy, I have to admit I was astonished by the runup in the company’s stock price last year. I bought more, at around $190 for the worst possible reason — that I not miss out in case it rose even higher. OK, I’m eating the short- to medium-range loss. The stock price (which, by the way, is not a reliable gauge of the company’s health) was clearly a little out of whack. Even now it’s trading high relative to earnings. But Apple’s got momentum, and in the long run it will continue to grow several times faster than the sector. I hope the stock price does a better job tracking the company’s growth in the future — rather than being run up by speculators then dive bombing.
I bought 5 more shares today.
Yeah, Apple is dead. And you know it’s true, because the press and tech pundits have never run a story like THAT before.
They are manipulating the stock with lies, for profit.
http://www.roughlydrafted.com/2007/08/05/more-on-scott-moritz-and-the-jim-cramer-street-misinformation-engine/
You know you can look at numbers in many different ways.
I mean, optionists will look at an RSI <= 20 with a bottoming of the Bollinger bands and read this as a bullish sign. It happened when the stock hit 120 and effectually rallied to 130.
With this pattern, I would normally look at resistance points using fibonacci patterns. So, taking 120 as the bottom and 200 as the top, you get an 80 point spread. If you take 12.5, 25, 37.5% of the 80 and add them to 120 you get 130, 140, 150 as resistance points. You could also look at the 50, 200 day moving averages to see where the stock could pop and meet resistance.
As for the sideways pattern movement described above, I think that you must look at the seasonality of this stock. It is driven by products, but also by people such as Cramer and momentum traders who look at the above very closely. It is a volatile stock that can jump 1-5% in a day and 20-30% in a week. If you’re long, I think holding and playing covered calls is a good way to go. If you’re short, God help you if they offer an Earth shattering announcement. If you’re looking for a time to get in, I would look at the Bollinger and RSI patterns. I follow those very closely for short term options trading.
Good luck.
Rick.
This guy flatly assumes Apple is an investment company.
Well, not really, they are in the business of making computers. They don’t sell air, but stuff that people really can use. And they are good at it.
“Well, not really, they are in the business of making computers. They don’t sell air, but stuff that people really can use. And they are good at it.”
Never confuse a company being a great company with it’s stock being a great investment. Apple had been driven up to high levels by unrealistic expectations. It was a great ride for a while but not based on the fundamentals of Apple’s business. Now it is correcting to more realistic levels.
The stock market is driven by rumors and lies these days. No one should be believed about any stock’s value. Companies that regularly turn profits seem to get the shaft because they aren’t making ‘bigger profits’. Geez, Apple’s doing well as a company. Any company staying in business and making good product should have a buy rating. Actually, if they know what’s best, buy back all the stock and go private again.
“Got it. Does anyone here know the name of the thirteenth Zodiac sign?”
It’s called “Ballmer”. Those born under that sign have a propensity to sweat, dance, lie through their teeth, and parade about with their tongue hanging out.
Probably the reason why they just stuck with 12 zodiac signs.
maybe if Apple decided to stop innovating and rest on its laurels this would be the case, but rivals are not catching up… they are falling further behind and Apple is accelerating.
Chuck you Farley.
Cubert:
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AMPAR
Ophiuchus
But then…. I should know better than to be serious….