Sunday, March 3, 2013

Re-visit Apple Stock


Who says great stocks can’t get pounded? If this doesn’t prove it to you that the bottom line doesn’t really matter, then nothing will. When a stock falls out of favor, it is going to get pounded. When it is in the accumulation stage, prices will rise. I do not care how right you think you are, if the stock is going down, you are going to lose money. Ok, Apple dropped another $10 a share Friday and looks to be a total disaster. Down 39% since last September, you gotta think the bottom is soon to come.


The 2 charts above are weekly charts but with different information drawn on them. The one on the left shows the next logical support point based on price struggling at a level, and that is $355. That’s another 17% drop. Ouch. I also wanted to show you that the Major or Primary uptrend is broken. If there was any doubt in your mind left that Apple is in it’s own bear cycle, breaking that uptrend was all there was left. The second chart, I drew Fibonacci lines which are used to calculate levels of support. The 50% is big and we are approaching that level quickly. I will watching here to see if price finally settles, but I will use a rule book to buy if that happens. Sometimes when a stock really falls out of favor it will retrace to 61.8% level but that is normally as low as a good stock will go. So I will keep Apple in my watch list and closely be watching for a price reversal soon.

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