Apple shares ready for a historical pullback?

“U..S markets are rallying again, and that has helped Apple bounce more than 10% off its yearly low,” Bill Maurer writes for Seeking Alpha. “While there was some enthusiasm after Berkshire Hathaway bought a stake in the technology giant, many still wonder what the company has in store with the iPhone 7. Next week’s Worldwide Developers Conference will provide some key clues, but investors should beware the stock’s underperformance during this event.”

“Of the 14 weeks above where shares have declined during WWDC, the average down week was 3.86%,” Maurer writes. “Given Apple’s recent rally and US markets’ near highs, we could be setting up for another decline.”

“I recently stated that Apple needs to provide some sort of major surprise at WWDC, and I still believe that is true,” Maurer writes. “If the company just details some little updates to its operating systems, we’re likely to see the annual WWDC week pullback in shares.”

Read more in the full article here.

MacDailyNews Take: Apple doesn’t “need” to do anything, but we’d certainly welcome “some sort of major surprise!”

6 Comments

  1. There are just two kinds of traders/investors. The first are corporate traders, also known as institutions. These do not have to be investment banks. They can be any corporation, regardless of the primary purpose of the corporation. Then there are retail traders. These are individuals not trading under a corporate umbrella. Other than a corporate/non-corporate structure the primary difference between these two investors is that corporations have the resources to do deep research into how a company is performing, while the retail investor relies on blogs posted on the internet. Corporate traders do not make decisions based on whether Warren Buffet bought or Carl Icahn sold. On the other hand retail traders trade on the flimsiest of rumors and unsupported speculation.

    Because of this retail traders can be manipulated by spurious headlines and vague alarmist stories, buying when they shouldn’t and selling when they shouldn’t. The overwhelming majority of internet authors have no desire to inform, rather they write to generate retail eyeballs to generate ad revenue. Seeking Alpha is one of many such sites.

    Is Maurer’s article actionable? Most likely not. Each quarter AAPL establishes a high and a low. The secret to investment success is not selling high, its buying low, and speculating on dips such as Maurer writes about is playing with fire. Invest long term (no shorter than 3 months) and you’ll do much better.

    During the last 9 months AAPL’s intraday low has traded below $93.50 four times: (Aug 25, 2015) $92.00, (Jan 21) $93.42, (Jan 28) $92.39 and (May 12) $89.47. On these days trading volume spiked as institutional buyers (the smart guys you want to emulate) recognize THE bottom and load up.

    Ignore WS price targets and learn how to forecast AAPL’s intraday lows, EVERYTHING else (Open, Intraday high and Close will be HIGHER. Dips, such as Maurer writes about, should be avoided at all cost.

    1. The volume of trading that is done by humans and small investors is miniscule compared to the automated trading done by investment companies & corporations today.

      It is true that human investors are prone to crowd mentality, using elementary tools and basically copycatting the bets placed by famous investors. However, they aren’t the ones moving big money around. That is done by investment companies, most of which do not serve the average small investor, and are not in any way interested in what Carl Icahn does. These companies buy and short every stock based only on short-term profitability of the trade, not on the underlying companies or people at all. Their purpose is to enrich the corporate fund and those of its management by sheer volume of money traded in milliseconds, not at all based on whether the traded company’s next product is well designed or it the company hires a genius or acquires amazing new technology. That’s all irrelevant to the institutional robot. Trades are merely automated based on algorithms that monitor stock movements and attempt to capture profits on the short-term turbulence. Of course, today’s trading bot wars actually amplify the turbulence, which makes it even more lucrative to ignore fundamentals and trade on the churn in ever-shorter time increments. And that is why fundamental valuations of companies can go so far out of whack.

      It is pointless for Apple or any sane company to keep pandering to Wall Street. Apple needs to turn its attention back to users. If served with new hardware and software that is useful and valuable, users will continue to reward Apple with increased cash flow, which Apple could return to loyal investors in a multitude of ways — my recommended way would be even more new product development and more company training events around the world. Unfortunately, Apple chooses to buy back stock and let its existing products grow stale. Why? Ask Cook. He’s the one who just can’t seem to figure out how to get new must-have products out the door on a regular basis.

      1. Great points Mike!

        It is pointless for Apple or any sane company to keep pandering to Wall Street. Apple needs to turn its attention back to users.

        Apple has great precedence from the past to show the path of the future. FOCUS remains their key word. This WallNut Street psychosis has apparently tempted them OUT of focus.

        1. Can’t help thinking that the focus on the New Headquarters project, social issues, China, India, etal, have no product or user focus. I’d guess Apple senior managers spend a lot more time on non-user issues than 3 years ago. Hopefully, when some of these big issues are settled (excluding social issues of course), we’ll see a renewed focus on users and products resulting in much higher quality software and hardware.

  2. historic – famous or important in history
    historical – of or concerning history, belonging to the past

    I think your headline writers meant the former.

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