“Can you see Apple (AAPL) under $60?” Zack Bass asks for Seeking Alpha. “I can, but first we have to deal with the next level of support, which is 74-ish. What really makes me a believer is how easily we broke through 85 yesterday. You know, 85 represents both long-term support, and an important psychological level. That’s because Apple hasn’t been below 85 since January 9th of 2007, the day Steve Jobs introduced the iPhone to the world.”
“How can this be? Apple’s fundamentals are strong, right? Yes they are. But that has absolutely no bearing here. Apple is simply falling with the rest of the market, and so long as there’s no confidence in the market, it will continue to fall. I suppose you could argue that Apple has taken more than it’s fair share, but trying to argue that point with the market is an argument you can’t win,” Bass writes. “You can only accept it for what it is.”
Bass writes, “Some have suggested that the incoming Obama administration announce its intentions, or at the very least work with a transitionary plan with the Bush administration. But that could have the effect of diminishing the Obama administration’s effectiveness if the economy should significantly deteriorate before he actually takes office. And I don’t think they want to cozy up with Bush in any shape or form. It goes against all historical precedent and may incite a public relations nightmare.”
Bass writes, “If we fall to the 666 level on the S&P, then this would equate to the next level of support for AAPL which would be in the 62-64 range. Although I find the support in this area to be quite vague, it wouldn’t be a stretch to see the lows of 2006 provide the next and hopefully final levels of support at 57 and 53. I know these numbers sound crazy, but who would have thought Apple would have lost over 60% of its value since it’s all-time high of 202 just 11 months ago? Also, if you recall, not more than a couple months back, we had respected Apple analyst Gene Munster reiterate his price target for Apple of $250! So what’s crazier now, a 300% gain to hit Munster’s target, or a 25% decline to reach 60?”
Full article here.
We live in interesting times.