Apple a bearish ‘one-day wonder’; current AAPL pattern reconfirms $500 target

“Apple has gapped up following its earnings report. Its relentless decline following that knee-jerk rally points to lower prices ahead,” Dr. Alexander Elder and Kerry Lovvorn write for MarketWatch.

“This is our third post on Apple in the Trading Deck series. On April 12 we published ‘Parabolic move makes Apple a short.’ On the day it closed near $623 we wrote: ‘A parabolic rally marks the terminal stage of a bullish trend. Every rally in history that went parabolic ended in a drastic drop,'” Elder and Lovvorn write. “On April 23 we published an update ‘Apple dip not done yet. Next stop $500.'”

Elder and Lovvorn write, “If you think that the trend of AAPL is still bullish, it is reasonable to expect another pullback to the value line. That line was at a $513 last Friday… On the other hand, if you think that the parabolic rise in AAPL has been broken and a bearish trend has began, we have a much lower target. Whether you’re a bull or a bear, the current pattern of AAPL reconfirms our first target of $500.”

Read more in the full article here.

Related articles:
The market currently values Apple’s earnings growth at $0.00 – May 7, 2012

23 Comments

    1. And why are they all approaching bankruptcy?

      “Entrepreneurs and their small enterprises are responsible for almost all the economic growth in the United States.” – Ronald Reagan

      “Government is like a baby. An alimentary canal with a big appetite at one end and no sense of responsibility at the other.” – Ronald Reagan

      “Republicans believe every day is the Fourth of July, but the democrats believe every day is April 15.” – Ronald Reagan

      “The problem is not that people are taxed too little, the problem is that government spends too much.” – Ronald Reagan

      “Facts are stubborn things.” – Ronald Reagan

      “Don’t be afraid to see what you see.” – Ronald Reagan

      1. You know, sometimes your posts go overboard a bit with the political angle . . . but this time you’ve certainly hit the nail on the head! Those are great quotes (and truisms).

      2. Sadly, we have not had a quality president SINCE. Ron Paul is the only one this time around who makes any sense. And his chance of getting elected is about as good as our government balancing the budget.

      3. http://money.cnn.com/2010/09/08/news/economy/reagan_years_taxes/index.htm

        Let’s be a bit more honest about Reagan…

        Key quote:
        “Reagan’s behavior might not pass muster with those voters today who insist their Congressmen treat every proposed tax increase as poisonous to the republic.

        “By today’s standards, the Gipper would easily qualify for status as a back-stabbing, treacherous RINO [Republican in Name Only],” wrote Tax Analysts contributing editor Martin Sullivan, in an article for Tax Notes in May.”

        1. How can I be “more honest” about Reagan than by posting his exact words?

          And, guess what, I do not care what some third-rate economist shill for the Obamination says.

        2. Some “economist” says something negative about Reagan and somehow it’s more “honest” about Reagan than his own words?

          It must be nice to be a liberal. You don’t have to think or actually know anything.

          And who needs facts when you can just make them up and get people to agree with your “facts”.

          1. Reagan, and most politicians, said/say a lot of quotable things that their supporters can cheer. When you look at their actual record it often shows a much different story. Saying things is easy and actually doing them is much more difficult (you could argue that Obama has learned that during his first term). That was my point.

            The Hero that modern Republicans and Tea Partiers make Reagan out to be is a construction of bold quotes and selective remembrance. If he proposed the revenue increasing measures that he enacted during his presidency now, those same people would balk at tax hikes and “wealth redistribution”

  1. Investing is a long-term event, not a short term of blips. Apple is still the largest company in the world, making the most profit in the world and has less than 10% of the PC share and less than 10% of the world has a smartphone/tablet. The market is HUGE to grow in. The iPad has no competition and the iPhone is the best phone on the planet and iPhone 5 is coming sooner than later and they are about to release iOS 6 and a new OSX. Traders are stupid. If they can’t sustain 100% growth a growth of 50% is a let down? Seriously? No company grows at even half the rate Apple grows and they are just getting started. Apple just has it’s toe into business and will explode once businesses switch to iPads (see Amtrack). It’s obvious this is a FUD dump setting up institutions to ride the huge wave. Especially if Apple announces something at WWDC.

      1. Nope, I’m saying that the FUD is made up crap. News for Apple hasn’t changed at all. Apple doesn’t release any news until they want. They released the biggest quarter in history, that’s Apples latest news, and the stock is down. Everything since then is FUD.

        And to drive down the stock as much as it has, it’s institutions selling off, not the general population. The institutions are taking our the profit they got from the last FUD run.

        It’s just a blip on a chart, Apple will be back up soon enough.

    1. It doesn’t matter how well a company is doing. the stock can still be going nowhere. And how does an investor make money? By selling high. What if the stock stays a dog for a long time then we’re screwed.

  2. I really don’t get where these guys are coming from. Record profits though out the down turn and still going. And yet they still don’t believe in Apple. Why isn’t Google down 100 plus points? Come on people, there is absolutely no reason for Apple to be priced at $500 when it should have been at $800 plus right now if it was any other company. No other company has the growth plus the cash with no debt like Apple and yet these IDIOTS still devalue Apple? None of there excuses makes any sense what so ever!

    1. It doesn’t have to make sense. All that stands out is that the market is corrupt and the people that control it are crooks. When company fundamentals no longer represent share value then the rules have been broken. I see Wall Street the same as a government that prints up paper money despite having nothing to back it up. Wall Street can print up paper money for whatever company they choose whether the company can live up the the rules or not. Amazon is a prime example. Anyone with any sense could see that they’ll never make enough revenue to make up for a P/E of 186 and nobody even bats an eye.

      When you base a company’s current value on future earnings then you’re basically giving a company false value because it’s just a guess about the future. I’d certainly like to know what group of people decide a company’s future earnings. Are these some sort of prophets who are infallible? Absolutely no one can say with certainty that a company’s growth is unsustainable and give a value for an event that hasn’t happened. That’s just guesswork and fabrication by crooks.

      If there is any truth behind the Apple slingshot theory then I think that’s proof enough that Apple is being totally manipulated by crooks. If you have the money to keep buying Apple on pullbacks then that’s good for you, but for people that don’t have an endless amount of money to pour into Apple it’s not that good. Apple may be back up soon enough, but it’s scary for investors that don’t have unshakeable faith in Apple.

      Since I bought into Apple years ago, I have nothing to complain about and I’m well ahead, but I’m only pointing out that there is something very wrong with what’s happening to Apple in particular and the market in general. Why is the market betting against Apple is beyond me. What does the stock market gain from that? Does investor uncertainty make the most money for hedge funds? The constant buying and selling of stocks definitely helps brokerage houses.

  3. These idiots talk about the shape of the curve of the price of the stock.

    The curve is all powerful. The news that the stock holders hear before they make those trades is irrelevant and irreverent.

    Bow down to the almighty parabolic curve!

  4. The math/profits for the big guys is easy to figure when you see daily moves of $ 10 x MILLIONS of shares traded by computer generated orders….. technology has the upper hand to maximize manipulation of the stock on a level unheard of in the history of the world!!

  5. My guess is that those criticizing Dr. Elder don’t even know who the man is. He’s far from an “idiot” and surely a much smarter trader than anyone frequenting this website.

  6. I’m sure he’s a smart guy. But APPL has surprised everyone. If you believe he is wrong in this instance, you may want to buy more APPL. I actually think he’s mistaken and view this as a buying opportunity. The “market” does not have a brain, collective or otherwise, and therefore it is impossible to predict individual behaviours. Trends can be identified after the fact, but I believe that is all. Humans evolved to identify trends in order to predict where the animals would be this time next year. Animals are more predictable that stocks. 🙂

  7. Nah. Apple will go higher.
    The reason it has gone parabolic this year is because that is has been undervalued for so long and still is frankly. AAPL have just catches up a bit with the companiy. Apple consolidates. The idiots that does not understand Apple have sold out. Many funds have sold their entire Apple position much lower because they don’t understand the company. It’s funny how a wicked valuation can be given a company that does not make any money but Apple who got 100 billion in cash and runs their own printing press is given no recognition at all.

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