Trends suggest big money is accumulating Apple, building a bottom

Stephen Suttmeier, a top Merrill Lynch technical analyst followed up “on a note he issued April 18, when Apple shares had broken through support at $420 on expanding volume and seemed to be headed straight toward the next support level at (gulp!) $325-$310,” Philip Elmer-DeWitt reports for Fortune.

“Friday’s Chart Talk acknowledged that April’s breakdown proved short-lived and that Apple was showing some ‘signs of bottoming,'” P.E.D. reports. “For evidence, he pointed to the chart of Apple’s on-balance volume (OBV), a technical indicator that is supposed to show whether smart money is moving into or out of a stock.”

P.E.D. reports, “‘Volume tends to lead price,’ says Suttmeier, ‘and OBV is a volume indicator that measures accumulation.'”

Read more, and see the chart, in the full article here.

4 Comments

  1. Well duh! There are a lot of investors and mutual funds who sold Apple when it was much higher. Of course they have money to buy back in at a much lower price. Sell high buy low. It’s not rocket science.

    1. Well yes but that is a much simplified view of the situation. Institutional buying is very important and can be profitable if you spot it and ride the wave.

  2. Merril Lynch, the sister BA division alongside Countrywide?

    Merril Lynch, the expert financial asshats that went bankrupt and are now owned by the greediest, dirtiest bank on the planet?

    Anyone who trusts their assets to Bank of America or any division thereof has totally lost grip of their senses.

    Moreover, make up your minds: is AAPL “cheap”, “value”, or “growth”? Seems to me it’s anything but growth right now, since Cook is managing it to be a utility instead of a product-focused company.

  3. I admit I thought Apple was cheap at 700 and allot of people on the street had the same view. We had price targets of 850, 900 and even 1111 dollars. For some reason everyone changed their mind when the stock turned around. Funny how no one ever sticks their neck out and actually up it downgrade before the fact. Well, in allot of cases anyway analysts seem to turn the way the wind is blowing and doing things after the fact. Of course the. Can’t know everything but still.

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