“Welcome to Apple (AAPL) hell,” Stephen Rosenman writes for Seeking Alpha. “The stock has gotten pummeled, dropping over 100 points since its April $644 high. Awful and painful, but nothing new as I’ve explained before. Apple pain happens every year.”
“Sometimes the stock gets mired in a hopeless malaise. Sometimes it craters. It’s always brutal either on a point basis or a time basis or both. It can last two months or nine,” Rosenman writes. “It happens every year. Different reasons, same miserable tape. Everyone remembers Apple’s fabulous climbs and everyone knows about this recent share price collapse, but very few recall the annual bruising Apple takes each year on a regular basis.”
Rosenman writes, “Witness the 2005 stellar Apple run from $35 to $85 in 8 months, followed by a 6 month 42% decline. That decline followed a sensational quarter. Yet, the market believed Apple had nothing left to offer the consumer. Apple was caput, relegated to the dustbin… And yet, you’ve got to look on the bright side. Every time, the market has written Apple off (and it happens every friggin’ year), the stock silences its bears with outrageous gains… For what it’s worth, the market gave Apple investors a momentous buy signal: The Relative Strength Index (RSI) for the stock dropped to 30. Last year, that was the biggest Apple trading event of the year: It marked the very bottom for the stock. Apple rose 35% over the next 4 months.”
Read more in the full article here.